The ratings of Société Générale reflect the group’s strong and well-managed retail franchises in France and Central & Eastern Europe. As well, the group’s diversified universal banking business model contributes to earnings resilience although there is room for profitability to improve. Meaningful capital markets activities and pockets of emerging markets presence expose the group to greater risks. The ratings also take into account the significant efforts the group has undertaken to reduce risks and to bolster prudential metrics on capital and liquidity.

For full-year 2016, Société Générale reported group net income of EUR 3.9bn, down from EUR 4.0bn in the prior year. French retail banking results were negatively impacted by low interest rates and elevated mortgage loan renegotiations while international retail banking results were significantly higher as performance notably in Russia and Romania improved. Global markets results were adversely impacted by political and economic uncertainty but the group’s balanced mix of equity and fixed income businesses supported earnings. The group’s capital position further strengthened during the year, with the fully loaded CET1 ratio reaching 11.5% as of end-2016.

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