The French multinational investment bank and financial services company enjoyed an excellent quarter, according to its CEO Frédéric Oudéa (pictured), with strong client demand for both structured and listed products.
Société Générale has reported revenues of €6.7 billion in the third quarter of 2021, up 14.9% compared to the same quarter last year. The increase was driven by growth in all the businesses, in particular global markets, financial services and financing & advisory.
In global markets & investor services, net banking income totalled €13 billion, up 8.4% from Q3 2020.
The business posted revenues of €814m in Q3 2021, up 53% compared to the prior year quarter. Volumes were particularly high on investment solutions products, with high demand from clients for both structured products and listed products.
Market conditions were less favourable for the fixed income franchise model due to a substantial spread compression on financing, coupled with reduced client demand in fixed income markets. The environment was also unfavourable in Asia. Fixed income & currency activities posted revenues of €380m, down 33% compared to a ‘good’ Q3 2020.
SRP data confirms that the French group is the number one issuer of listed products in Q3. It issued some 121,696 turbo certificates in the quarter, an increase of 20% compared to Q3 2020 (101,303 turbos).
The vast majority of leverage products were targeted at investors in Germany (108,597), followed by those in France (7,685), Belgium (4,417), the Netherlands (3,776) and Portugal (985).
The bank also issued 18,956 listed flow products (reverse convertibles, bonus-, capped bonus-, and discount certificates) during the period, again mainly targeted at the German investor but also, to a lesser extent, at investors in Belgium, France and the Netherlands (Q3 2020: 34,526).
On the primary market Société Générale launched public offers in 11 different jurisdictions. Some 420 products worth an estimated US$3.4 billion were issued between 1 July and 30 September 2021 (Q3 2020: US$3.2 billion from 734 products).
In its home market France, the bank collected €2.4 billion (US$2.8 billion) from 210 products that were available via eight distributors, including, among others, Ageas Patrimoine, i-Kapital, Oddo BHF Banque Privée and Vital Epargne.
Ninety-seven percent of all French products were autocalls, with average soft capital protection barriers of -50.15% and an average coupon of just over six percent. Some 106 products were linked to a single index, including 80 that were tied to decrement indices such as Euro iStoxx Banks GR Decrement 50 Series 2 Index, Euronext Sovereign Economy Selection Eurozone 50 Decrement 50 Index, and the MSCI EMU Circular Economy Sustainable Impact Select 50 Points Decrement Index.
In Italy, SocGen collected €110m from 22 products whilst it was also active in Germany (€51m from 58 products), the UK (£31.5m from 18 products), and the Netherlands (€15.5m from five products).
Outside of Europe, the bank acted as the manufacturer for 13 products (US$150m) in Japan. A further 59 products with estimated sales of US$220m were targeted at private banking investors in Taiwan.
Lyxor’s net banking income amounted to €64m, an increase of 21% compared to Q3 2020. Assets under management, at €169 billion, were up 28% from end-September 2020. In the first nine months of 2021, the asset manager’s revenues were 17% higher than in 9M 2020, with net inflow of approximately €14 billion.
As of 30 September 2021, the group’s consolidated balance sheet included debt securities issued of €133.2 billion (end-December: €139 billion) and an outstanding for hedging derivatives of €9.6 billion (€12.5 billion).
The total parent company’s 2021 funding programme, which comprised €16 billion of structured notes issuance and €14.5 billion of vanilla debt, was successfully completed on 20 October 2021.
Funding conditions were competitive, the group stated. The average maturity of 5.4-years was unchanged from FY2020.
Click the link to read the full Société Générale results and presentation.