Ladies and gentlemen, welcome to the Société Générale Second Quarter and Half-year 2025 Conference Call. I now hand over to Mr. Slawomir Krupa, CEO . Sir, please go ahead.
Thank you. Good morning, everyone, and thank you for joining us today for our H1 results. I am delighted to present to you another strong set of results, as well as an important new milestone in the execution of our strategic plan. Last quarter, we demonstrated that our continued improvement is sustainable, and we continue to perform ahead of our end-of-year targets. Through consistent organic capital generation, we have further strengthened our capital ratio. Our overall performance gives us the confidence to take two major steps forward in our commitments. We are upgrading our annual targets, and we now expect a ROTE around 9% for 2025. We are further improving shareholder return with today's announcement of our first-ever exceptional distribution of a portion of our excess capital through an additional share buyback of EUR 1 billion. This is an important first step.
Additionally, we are introducing an interim dividend of EUR 0.61 per share against the results of the first half of 2025. The unwavering dedication of our teams makes all this possible. We continue to execute our strategic roadmap with discipline and determination, and as a result, we are moving into the second phase of our three-year plan with equal confidence based on this year's first-half results. Revenues increased by 8.6% versus H1 2024, excluding asset disposals, at a growth pace well above our initial target for 2025. Costs continue to decrease at a higher pace than initially planned. They are down 2.6% since the beginning of the year compared with last year, excluding asset disposals. This positive differential translates into a current group cost-to-income ratio of 64%, already below our initial annual target and roughly seven percentage points better than last year.
Asset quality remains strong, the cost of risk remains low, and below our annual guidance at 24 basis points for the first half. At this point, we see no signs of significant deterioration, and regardless, our assessment of the current environment keeps us prudent in terms of risk management. Together, all these factors contribute to a group ROTE of more than 10% at the end of the first half, with the group net income reaching EUR 3.1 billion. This is well above our initial annual target. Ultimately, our capital ratio further increased by 10 basis points in Q2 2025, and the CET1 ratio now stands at 13.5% after accounting for the additional share buyback of EUR 1 billion. Therefore, we have decided to upgrade our annual targets on cost-to-income and ROTE based on strong positive jobs.
Looking forward, we now expect a cost-to-income ratio below 65% in 2025 versus below 66% before, and as the cost-of-risk guidance remains unchanged, we now expect an annual ROTE around 9% in 2025. We're basing this decision to upgrade our targets in what we see in the numbers at the business level. We implemented our strategy through specific business initiatives, as you know, which are delivering positive outcomes throughout the group. In French Retail Banking, Private Banking, and Insurance, we are now pursuing a stronger strategic direction and renewed management practices, which leads to an increased commercial momentum and the opportunity to extract more synergies across the French retail businesses. This is boosting growth in mortgage origination, in fees, in Private Banking AUM, and in life insurance outstandings. At the same time, BoursoBank has already reached 8 million clients 18 months ahead of our initial CMD target.
It keeps delivering an improved financial performance, which will accelerate next year. Our focus for the remainder of the year will be to maintain our current steady pace in terms of client acquisition. Overall, the [RPVI] RONI rose to 10.4% in H1 2025 versus 3.3% in H1 2024, and the cost-to-income ratio decreased to 67% versus 81% over the same periods. In Global Banking and Investor Solutions, we continue to deliver a high, consistent, stable, and predictable performance for their fifth year in a row within all our businesses, particularly within Global Markets. We have leading franchises in our Global Banking business that are well positioned across megatrends like infrastructure investments, energy transition, and defense. Overall, we continue to deliver leading profitability levels with a RONI of 17.7% in H1 2025 post Basel IV.
In Mobility, International Retail Banking and Financial Services, profitability is up by more than 2 percentage points versus last year. Margin and synergies at Ayvens are also increasing. KB and BRD are performing very well and leverage a successful digital overhaul. At the same time, we continue to streamline our business portfolio with the closing of the disposal of our subsidiary in Burkina Faso and the announcement of the disposal of our subsidiary in Cameroon. Our CMD commitments were simple: deliver value creation anchored in a strong capital position. We also committed to being good stewards of the capital of our shareholders by being more efficient in terms of capital allocation across our businesses, by streamlining our portfolio through targeted disposals, and by improving, of course, our operating performance. The tight execution of this roadmap gives us today the ability to substantially enhance shareholder returns.
In this first half, we brought our CET1 ratio to 13.8% at the end of June 2025 before excess capital distribution, and we are therefore announcing the first additional share buyback of EUR 1 billion, which represents minus 25 basis points of CET1. Given that we have already received the ECB approval, it will be launched as soon as next Monday. As previously stated, we will continue to proactively manage our sustainable excess capital in the best interest of shareholders with a mix of exceptional distribution and profitable disciplined growth. We are also introducing an interim dividend from 2025 onwards. We intend to distribute an interim cash dividend of EUR 0.61 per share this year, representing 35% of the H1 2025 total distribution accrual. It will be paid on October 9 of this year. I now leave the floor to Leo, who is going to take you through our second quarter performance.
Thank you, Slawomir, and good morning, everyone. Let us move on to the financial performance in Q2 2025. It is another strong quarter for the group, which reports a group net income of EUR 1.5 billion, up 30.6% versus Q2 2024. This translates into a higher return on tangible equity of 9.7% versus the 7.4% that we had in Q2 2024. Going through Q2 2025's details, we can see a solid revenue growth of 7.1% versus Q2 2024, excluding disposals, driven by strong commercial performance across businesses, as we will see later. Reduced costs by -2.8% versus Q2 2024, excluding the global employee ownership program GSOP and other disposals, showing our continued firm discipline on costs. Both movements translate into a further improvement in operational leverage, with a cost-to-income ratio of 63.8% in Q2 2025, down by more than 4 percentage points versus Q2 2024.
A shift despite a one-off non-cash charge of EUR 100 million related to the launch of the global employee share ownership program in June 2025. As a quality-wise, the cost of risk continues to be low at 25 basis points, at the lower end of our guidance between 25 and 30. In addition, as mentioned by Slawomir, we continued to simplify our business portfolio with the closing of the disposal of SocGen Burkina Faso and the announced sale of SocGen Cameroon. Moving on with the presentation on slide nine, we present the main drivers of our revenue growth in Q2 2025. Disposed assets generated EUR 342 million of revenues in Q2 last year, mainly Morocco, Madagascar, SCEF, and private banking in Switzerland and the UK. Therefore, group revenues increased 1.6% versus Q2 2024 on a reported basis, but 7.1% when adjusting for 2024's asset disposals.
Revenues in French retail, private banking, and insurance increased by 10.7%, excluding disposals, and by 2.8% if we also restate the drag from Scholz and hedges in Q2 2024. Revenues of global banking and investor solutions are up 0.7% versus a strong Q2 2024 to reach a high level of EUR 2.6 billion, driven by solid performance in fixed income as well as in financing and advisory. Lastly, revenues in mobility, international retail banking, and financial services grew by 7.3% versus Q2 2024, excluding disposals, supported by the sustained growth of Ayvens, as we will see later. Continuing on the next slide, we can observe the ongoing improvement in our operating leverage. Total cost fall by 5.2% between Q2 2024 and Q2 2025, confirming our discipline on cost management.
This is equivalent to a -2.8% reduction, excluding both disposals and the charges related to GSOP launched in June 2025 for an amount of EUR 100 million. This charge of GSOP is EUR 100 million, is a non-cash item which therefore has no impact in CET1 nor on distributable net income as the P&L charge is offset by an equivalent positive impact in the equity. The decreasing cost is supported by EUR 93 million of lower transformation charges, as expected, and net cost savings across the board representing EUR 30 million. As a result, the operating leverage improved in all businesses, driven by both high revenues and decreasing costs, as shown on the right-hand side of the slide. The improvement is particularly relevant at RPBI, with a decrease of 12 percentage points from 77% last year to 65% in Q2 2025.
The group cost-to-income ratio falls 4 percentage points from 68% last year to the current 64% in Q2 2025. Overall, we are very confident we will reach our new target of a cost-to-income ratio below 65% in 2025. Let us take a closer look at the asset quality on slide 11. The cost of risk in Q2 2025 remains low at 25 basis points, which is at the lower end of our guidance, only 2 basis points higher than last quarter and -1 basis point below Q2 2024. This quarter's cost of risk mainly comprises stage 3 provisions, which account for EUR 390 million. In parallel, as you can see, total standing stage 1 and stage 2 provisions remain high at EUR 3 billion, slightly down from Q1 2025, mainly due to asset disposals and efforts. Stage 2 provisions, in particular, represent 4.3% of the corresponding stage 2 stock of loans.
Asset quality is solid, with an NPL ratio at 2.77%, down 5 basis points from the previous quarter. Also, the net coverage ratio remains sound at 81% in Q2, down 1 percentage point from Q1, basically because of asset disposals. Let's now turn to capital on slide 12, where we can see our strong capital position evolution. This is the basis for the first distribution of excess capital, as mentioned earlier by Slawomir . The CET1 ratio reached 13.5% in Q2 2025. This is 330 basis points above MDA. This strong ratio is already net of the additional share buyback of EUR 1 billion, which corresponds to an impact of 25 basis points. All in all, we see the quarter, a net increase of 35 basis points before the additional share buyback, or a net increase of 10 basis points after it, as explained from left to right in the slide.
On the one hand, retained earnings contribute with 50 basis points, 15 basis points after accruing a 50% payout. We have a positive impact from asset disposals, not only related to the sale of Burkina Faso, some positive regulatory adjustments with an impact of 8 basis points, and finally, other impacts which add 2 basis points. In addition, as you can see in the bottom right-hand side of the slide, all other capital ratios are comfortably above the regulatory requirements. We have the liquidity profile of the group on slide 13. Société Générale maintains a strong liquidity profile with an LCR ratio at 148% at the end of Q2 and an LCR ratio at 117%, both well above regulatory requirements. Liquidity reserves stand at EUR 313 billion in Q2, with a balanced mix between cash and securities.
We've already executed around 80% of the long-term funding program with good access to liquidity in all currencies on the back of a strong long-term rating from all agencies, including, as a novelty for the quarter, the new stable outlook from Moody's. The deposit base remains strong, granular, and highly diversified. Overall, the long-term depot stands at 77% for the group. In slide 14, we show a summary of the P&L of the group for Q2, which we will cover in more detail in the coming slides. Let's move now to the business performance on slide 16, starting with Soc Gen Network, Private Banking, and Insurance. In Q2 2025, loans outstanding decreased by 2% compared to last year, are flat when excluding state-guaranteed loans, while slightly up versus Q1 2025.
Home loan production continues to increase strongly in the quarter thanks to a strong commercial momentum, and it is up by 175% versus Q2 2024. As expected, voluntary deposits are stabilizing, as well as the mix between sight and term. They are slightly down 1% versus Q1 2025. Linked to this deposit evolution, we can see that the strong momentum in asset gathering continues this quarter. On the one hand, we see AUM in Private Banking reaching EUR 132 billion in Q2, increasing by 6% versus Q2 2024 if we adjust for asset disposals, while outstandings are up by more than EUR 2 billion when compared to Q1. On the other side, life insurance outstandings increased by 5% versus Q2 2024, reaching a total of EUR 150 billion. That also represents plus EUR 2 billion versus Q1, thanks to continued strong interest. Moving now to BoursoBank.
Once again, in Q2, the bank maintained a high pace of acquisition, gathering 444,000 new clients. More importantly, it already reached the EUR 8 million target in July. This is six quarters ahead of its December 2026 objective. This growth is achieved together with a churn rate that remains below 4%. In terms of client service, BoursoBank was recently recognized as the best digital bank in France by Euromoney. At the same time, assets under administration improved further, reaching EUR 70 billion. This shows that BoursoBank as a gathering remains very strong, notably with deposits growing by 16% versus Q2 2024. Similarly, life insurance outstanding increased by 7% versus Q2 2024, with a high rate of unit-linked products representing 48% of the total.
Note also that BoursoBank posted strong growth in market orders, plus 33% versus Q4 2024, while finally, on the lending side, total loans outstanding grew by 10% versus Q2 2024. Reviewing now the four-pillar level for French Retail Banking, Private Banking, and Insurance on slide 18, I would like to highlight once again the very positive evolution of the cost-to-income ratio, which falls more than 12 percentage points to 65.1% in the quarter. This is driven by the strong 10.7% increase in revenues, excluding disposals, and the strict cost discipline, as demonstrated by the decrease in costs by minus 5.7% compared to Q2 2024, again excluding disposals. Further down in the P&L, we see that the cost of risk came at 25 basis points, lower than the 29 that we had in Q2 2024.
Collectively, this results in a net income of EUR 488 million in Q2 2025, equivalent to a return on tangible equity (ROTE) of 11.2% for the quarter under Basel IV requirements, which compares to 5.7% last year under the previous Basel III. Turning now to Global Banking and Investor Solutions on slide 19. Q2 2025 total revenues for GMIS are stable versus Q2 2024, which was particularly strong in our market businesses. Focusing on global markets, Q2 2025 revenues increased slightly by 0.8% versus Q2 2024, combining normalization in equity revenues and a reversed performance in FIC. On the equity revenue side, these were resilient in Q2 2025, down by 2.9% versus Q2 2024. Commercial activity remained sound in equity derivatives. It is very important to highlight the base effect in the comparative with Q2 2024, where equities benefited from very high volumes across all activities.
Indeed, Q2 2024 was our best second quarter since 2010 in this segment. FIC delivered a solid quarter with revenues increasing by 7.3% versus Q2 2024, thanks to the robust performance in activities like flow and finance. We also benefited from strong commercial activity in a challenging economic environment where visibility on global macro prospects is uncertain. With that, FIC managed to mitigate the slowdown in derivatives. Lastly, in Securities Services, revenues eased by 3.1% versus Q2 2024, where the decrease in interest rates has impacted the steady commercial momentum in the quarter by SGSS. Let's move on to slide 20. Financial and Advisory total revenues are up by 1.3% versus Q2 2024. Global Banking and Advisory continued to improve, with revenues increasing by almost 4%.
This good performance is largely driven by acquisition finance, fund financing, and infrastructure finance, as well as a continued upward momentum in both originated and distributed volumes. In Investment Banking, DCM delivered a good performance in Q2 2025, while ECM is showing encouraging signs of recovery in a market environment that is still challenging. Regarding Transaction Banking, revenues declined by 4.7% in Q2. Performance was impacted by the decrease in interest rates, offsetting the solid commercial activity with both corporate and institutional clients. Looking at the whole GBIS pillar on slide 21, we can see that overall, GBIS maintains a solid performance, with revenues reaching EUR 2.6 billion in Q2 2025, slightly up versus, as mentioned, a very high Q2 2024. We keep up strong cost discipline with expenses down minus 1% in the quarter.
The cost-to-income ratio decreased 1.1 percentage points from 62.7% in Q2 last year to the current 61.6%. Cost of risk remained contained at 19 basis points in the quarter. As a result of all the previous, GBIS delivered net income contribution of EUR 750 million in Q2 2025, equivalent to a high RONI of 16.8% under Basel IV. Let's now move to International Retail. Overall, revenues continue to increase this quarter, up by 2.7% compared to Q2 2024 at constant exchange rate and perimeter. This is driven once again by the European businesses. In Europe, loans are up 7%, while deposits remain stable versus Q2 2024 at constant exchange rate and perimeter. Revenues, on the other hand, increased by 6% versus Q2 2024, again at constant exchange rate and perimeter, supported by higher net income both in KB and BRD.
In Africa, loans decreased by 3% versus Q2 2024 at constant exchange rate and perimeter. Given economic and political situations in certain countries, we observe a wait-and-see attitude in the corporate sector. On the other hand, deposits within the same perimeter grew 2% year on year. Revenues remained resilient, though, versus that high Q2 2024, with an increase in net interest income of 3% versus Q2 2024 at constant exchange rate and perimeter. Focusing now on Mobility and Financial Services, the combined businesses posted a strong increase in revenues of 11.1% versus Q2 last year. At constant exchange rate and perimeter, this is excluding, for example, the disposed as gas. Haven's revenues improved strongly by 10.6%. Margins increased to 550 basis points from 539 in Q2 last year.
UCS revenues were supported by lower depreciation, and the UCS cost per unit are normalizing, but still at a slower pace than anticipated. They represented around EUR 1,250 per vehicle versus the EUR 1,480 per vehicle in Q2 2024. Earning assets remained roughly stable at around EUR 53 billion, on the back of proactive fleet management to favor profitability in core countries. On an underlying basis, excluding notably the fall in depreciation charges and Turkey hyperinflation adjustments, revenues fell by 3% versus Q2 2024. Consumer finance performed very well this quarter, with revenues up by 12.6% versus Q2 2024, benefiting from margin expansion and higher NII, mainly in France, as well as the minor positive impact from asset revaluation. We see positive growth, Josh, driven by higher revenues by 7.2% and decreasing costs, down 4.2% versus Q2 2024, both at constant perimeter and exchange rate, despite an inflationary context.
This, once again, illustrates the strict cost discipline across the businesses. The cost of risk stands at 35 basis points, falling from the 45 basis points in Q2 2024. Overall, the whole pillar of Mobility, International Retail Banking, and Financial Services posted a net income of EUR 404 million, up by 41% versus Q2 2024, adjusting for the perimeter and exchange rates. Finally, the RONI improved 4 percentage points to 15.3% under Basel IV. To conclude now the financial performance, let's move to slide 25 with the Corporate Center. NBI improved versus Q2 2024, notably thanks to a proactive, efficient management of excess liquidity. Operating expenses include EUR 100 million related to the group employee share ownership program, which, as explained before, is a non-cash item and therefore does not affect CET1 nor shareholder distribution.
In addition, Q2 2025 included notably the disposal of Burkina Faso, both in net profit or losses from other assets. Let's now give back the floor to Slawomir.
Thank you, Leo. Our economies and industries are facing multiple challenges in terms of technology, environment, and social change. Navigating these complex dynamics requires, in our view, perspective and anticipation. We announced this quarter the final composition of our Scientific Advisory Council. It consists of eight members, world-leading scientists and experts with complementary skills. No group is better equipped, in our view, to help us responsibly take advantage of the secular trends that will influence the entire world economy for decades to come. At the same time, we continue to craft innovative solutions. For instance, we recently participated in the United Nations Ocean Conference, and we acted as the exclusive advisor for the Maritime Upgrade Debt Fund.
Through our REIT subsidiary, Société Générale completed its ninth equity investment within the EUR 1 billion envelope, which we dedicate to support leading emerging players in the energy transition. An upgraded rating at the last Sustainalytics review puts us among the top banks worldwide, and we also received the World's Best Bank for ESG award from Euromoney. As usual, let's finish simply by looking at the facts. Our track record shows that we consistently turn our commitments into actions and our actions into tangible results. We are on track to deliver on the upgraded targets for 2025 and to deliver our plan in 2026. Next year and for years to come, we will stay relentlessly committed to bringing costs down and increasing efficiency. This is crucial for us and will remain crucial for us in order to consistently deliver a sustainable value creation for all our stakeholders.
Thank you very much, and let's now start the Q&A with our usual polite request to stick to two questions per person. The floor is yours.
Thank you, sir. Ladies and gentlemen, if you wish to ask a question, please press star and one on your telephone keypad. The first question comes from Tarik El Mejjad of Bank of America.
Hi. Good morning, everyone. Sorry for my voice. Well done for those strong sets of results for the whole team. First question on capital, please. You had a strong capital building Q2 with a strong beat, 30 bps even the pre-buyback. You should be ending the year on 13.6%. If we add Cameroon proceeds, 6 bps, and we add the share issuance for employees of 5 bps, you are way, way above your minimum requirement.
First of all, can you confirm what's the moving parts in the second half this year in terms of capital, if I'm missing something there beyond Cameroon share issuance and organic generation? Also, you mentioned a few times that you don't want to build much capital excess above 13. Is it realistic to expect more share buyback in the second half of this year if you start yours on August next week? Given the liquidity, you can probably finish it in the next three months. By the way, do you have a deadline on when you want to complete it? You mentioned a few times in the slides in the call that this is your first exceptional. Would you be planning to do one? Is it realistic? Have you accessed the ECB for another one? That's my first question. The second one is on the targets.
2025 new targets upgrade is welcomed, and I think remains on a cautious side. My question is more on 2026, where now it's very close to 2025 targets, given that we expect some acceleration from many fronts, growth in France, cost synergies, and so on. What makes you think that 10% is the max you can deliver in 2026? When is actually your next CMD? Is it something early next year? Thank you.
Thank you, Tarik. It feels like 10 questions, but I'll try and answer. On capital, let's keep it simple. We do have a high capital ratio. We did say very clearly that we do not intend to accumulate capital above our target.
We can only acknowledge that we are creating organic capital further, and so we most likely be regularly, for the foreseeable future, in a position to have to make decisions on how to use excess capital. We have said in the past that we will use this by being very, let's say, rigorous in analyzing the opportunities between additional return to shareholders, in particular in the form of buybacks, which still has a high ROI, although decreasing, which is good news, obviously, and organic growth opportunities, which are substantial in our businesses and which carry, as you know as well, usually very high marginal rates of return on employed capital, and then theoretically at least inorganic opportunities. We will continue to do this, and I can only acknowledge that we're in a position which will lead us to have to make these decisions regularly.
We don't comment on what we filed with the ECB or when we filed with the ECB. Just look at our track record and what I just said. In terms of your second question, the 2026 guidance is not. Changed at this point because we don't change intra-year longer-term targets. We will, as always, comment very precisely on them at Q4 2025 and give our indications for the 2026 performance. Again, it is true that if you look at the underlying performance, so if you adjust for the exceptional positive items that we had in H1, we are running slightly above 9% in terms of group ROTE. Once again, I can only acknowledge the fact, but the guidance at this point is unchanged. Rest assured that we will do our best in a given environment to deliver the best possible results.
In terms of CMD, I don't have anything particular to announce. We are committed to transparency. We are committed to open, precise, fact-based dialogue with our shareholders. It is fair to expect that we will clearly discuss the forward-looking plan at some point next year, but no decision was made as to when, how, and that's it. Thank you.
Thank you.
The next question is from [audio distortion ] of Barclays.
Yes, thank you. I wanted to ask you a question on French Retail Banking revenues specifically. Simply asking why you're not providing us with a guidance on the revenue outlook there for this year. We have a scope that is clean now in this division post Q2. We are past the half-year mark. We have visibility on the livreur rate, what's going to happen actually tomorrow. Why don't you want to provide us with a guidance on French retail revenues?
Maybe, can I ask in that direction, should we expect a pickup both in NII and fees from here? Compared to the Q2 base in French retail, that is then further emphasized by the Boursorama strategic change on the customer acquisition in 2026. Thank you.
Thank you. On the first question, I mean, we have not been providing this guidance. To my recollection, at least I'm certain not under my management. I think at some point, I'll be very honest with you and be very direct. At some point, these things can only be estimated, and then they carry an inordinate amount of, let's say, emotions. I think it's more important to discuss the substance, right? The substance, and it's a little bit your second question, but the substance is we have indeed a clean slate now.
We have dynamics in the French market, which are basically volumes, both in terms of deposits and loans in absolute terms, should be. Zero plus in the current environment, although we had a technical beat on French GDP yesterday, we remain confident that it's a resilient economy with a strong corporate structure across the entire country, etc. We clearly do not expect at this point anything explosive. On volumes, something which would be zero plus. In terms of margins, we see a slight improvement, especially driven by the stabilization, which we discussed in the past many times in terms of the deposit mix. Lower costs of deposits because of the lowering regulatory savings rate and coupled with the stabilization, especially in terms of the sight deposits. This will be a feature which you understand is going to be slightly supportive, right?
We're constructive on NII based on what I just said. Also remember, we have a progressive repricing of the backbook, which in the French retail market is obviously heavily weighted towards mortgages and long-dated fixed-rate mortgages. That backbook is slowly repriced up, and that's also something which is slightly supportive. Overall, you see, we're fairly constructive, and that's what I can say on NII. On fees, as you've seen, we're up quarter on quarter and the first half to the first half of last year. For technical reasons, flat versus Q1 2025. It has to do with campaigns, dynamics, marketing campaigns on specific products, etc. Here again, without expecting something that would be in the very high single digits in terms of growth, we are constructive as well as we support a better increased momentum, more focus on origination in the retail network.
As you've seen, pretty strong dynamics across Boursorama, BoursoBank, Private Banking, and of course, the life insurance products where we have leading market performances. That's the color I can give you on the revenue outlook. In terms of 2026 and going forward, basically, it's all the same ingredients that everything else being equal. In that environment, in terms of GDP, you will see that steady increase. Again, everything else being equal based on the exact same ingredients that I just described.
Thank you.
Thank you.
The next question, sir, is from Matthew Clark of Mediobanca.
Good morning. A couple of questions on the CIB, please. Firstly, could you talk about sequential GTPS revenues, second quarter versus first quarter? When I try to impute what they've done, it looks like they came down quite a lot. Just to understand. What the drivers are there, if that's the correct interpretation.
Whether you see the first quarter or second quarter as more of a run rate for GTPS after the tremendous growth for the last few years. The second question is on the Bernstein joint venture in the U.S. I'd have thought it should have been a very strong quarter for that business, but looking at the associates line within GBIS, it's actually got slightly worse. Just to understand, is that joint venture going to plan, and why aren't we seeing any impact from that in the associates line of GBIS yet? Thank you.
Thank you. On GTPS, it's very simple. It's volume slightly up, rates significantly down. This is one of these businesses that we have in the mix, which is directly correlated to rates, which had significant tailwinds in the last few years. This quarter, again, was experiencing these headwinds from a rates perspective.
It's indeed down a few percentage points versus Q2 2024. You're right in that assumption. It's a matter only of price effect. In terms of commercial dynamic and volume growth and client acquisition, we're still growing substantially in this business. We have invested a lot of money over the last five years, and we continue to invest in this business. In terms of Bernstein, you have one particular technical fact, which is Bernstein America, so our U.S. business, U.S. JV, is not consolidated. You don't see it in the revenue numbers. The quarter was logically good at that unit, but we're not reporting it in the NBI line because of the structure of the JV at this point. It might change in the future gradually to something more standard. Today, this is why you don't see this.
It's purely technical, but indeed, from an overall perspective in terms of revenues and integration, team dynamics, we are very happy with how it works. Obviously, we would have liked to have more volumes on the primary market in the world. This has, for all kinds of reasons which you know perfectly well, was subdued. It will be another supporting factor in the future.
Can I just follow up? I guess, why don't we see it in the associates line? Below the operating profit line, presumably that's where the net profit, your share of the net profit gets booked. I'm just curious why we're not seeing a modest tens of millions impact there from that business.
And then secondly, just coming back to GTPS, have you now digested the recent rate moves within that second quarter revenue number, or do you maturity intermediate there, in which case we've still got kind of a lag to drag to come through as a kind of replicating portfolio rolls over?
I mean, on Bernstein, again, the current structure of the GV is such that the ultimate bottom line in a business which, as you know, has a high customer income ratio anyway, is more limited than what it will be down the road. The share of the bottom line that we get from the U.S. business is lower than what it will be in the future at this point. This is just the technical way the GV was set up at its inception.
In terms of GTPS, most of the rates action happened, and then it's just a matter which, frankly, I don't have in my head of the average duration of some of the products, etc., etc. Philosophically, this is cash management and transaction banking, so most of the adjustment happens on a very short-term basis. The answer to your question is most of it is behind us. Again, just to give you a sense in terms of the volumes, we're talking about high double-digit increases in terms of the volumes at this business level. Thank you.
Thank you very much.
The next question is from Delphine Lee of JP Morgan.
Yes, good morning. Thanks for taking my questions. My first one is on the cost management in general. You've done really well so far, minus almost 2.5% in the first half.
We're just wondering, for 2026, is the objective to have, is it specific to this year, or can we expect also a reduction in 2026 as well? And in 2026. The second question is on capital. I mean, you're at 13.5% at the end of June, and clearly, you're going to have a bit more capital generation in the second half. You talk about 13%, but there's clearly still a bit of buffer. I was just wondering if the intention is to get closer at some point to the 13% and step up the buybacks, or is it to have a little bit of room above the 13%? Thank you.
Thank you. Thank you. Hi. On cost management overall, let me say it this way, right? Keeping with my promise not to change the guidance for 2026, but I will give you color.
Referring you to some of the comments I made in my presentation, which I make very often, which is efficiency and cost structure of the bank is the number one focus of the management team because this is the heart of. Our specific idiosyncratic challenge. We are very good, and I explained this very clearly at the CMD as well. We are structurally, historically, through the cycle, very good at generating gross margin. Defined as NBI on all WA across virtually all our businesses if you look through the cycle. Yes, with a cost structure which was inefficient and which is getting better, but there's room to go further down. It must be an intense focus for the management. It has been. You're seeing it, and it will remain so.
Based on this comment, you can expect us to continue to try to do our best to decrease structurally and continue to decrease for the years to come structurally the inefficiencies throughout the company. Let me leave it at that. It's a very, very serious, strong commitment of ours. In terms of the capital, thanks for the very precise question. Listen, as we said, we will not run the show at 13.01. That's for sure. It's a matter of just being serious about an important topic for any bank. On the other hand, we will converge in terms of using the excess capital to something which is close to 13, right? I mean, there's no buffer on top of the buffer. At 13%, we have enough buffer to handle our destiny well in terms of whatever headwinds we may face. The answer clearly is over time. Over time.
I'm not saying it's going to happen in Q3, but over time, strategically, the direction is to converge to something very close to 13.1, not being one basis point above. Hopefully, that gives you some clarity. Again, it's a mix. Dealing with the excess capital is a mix of intentions between shareholder return and investment in the business, which we will carry out very transparently, very openly, and with a very high regard to high marginal returns if invested in organic growth.
Great. Thank you very much.
The next question is from Giulia Miotto of Morgan Stanley.
Yes, good morning. Thank you for taking my questions. First one, on BoursoBank, the target is for EUR 300 million net income next year, but given that you are so much ahead of target in terms of customer acquisition, how is the profitability of that business at the moment?
Could you share some numbers on that? Secondly, I noticed quite a big drop in loans in GBIS in slide 39, and I was wondering what is driving that? Thanks.
Thank you. On BoursoBank first, and then I'll let Leo answer the second question, which, as you will see, is a fairly technical matter. On BoursoBank, yes, we are ahead. The average number of clients in 2026 and their average tenure with the bank will be higher than initially expected. The one thing that is lower than initially expected, obviously, is the other rates. Remember, in the way BoursoBank generates its income, it is heavily weighted towards NII. This is why, at this point, even if we were upgrading or discussing targets for 2026, which we are not, but even if we were, we would have to take this into account.
At this point, frankly, we would not, in this hypothetical discussion that we're not having, we would not upgrade that number because of what I just described. In terms of P&L drivers at BoursoBank, without going into the details because we're not disclosing them, you should think about this. It's NII stemming a lot from deposits, from the deposit base, and a certain amount of fees across a very vast product offer, but also with a USP which is based on fairly competitive rates on all the basic products, right? It is highly rate dependent. On the negative side, which is actually booked as negative NBI, you have the acquisition costs which are all accounted for entirely the minute they happen. At this point in time, nothing's capitalized there.
You have the entirety of the cost of acquisition being deducted from the NBI when the acquisition of the new client happens. That's the color. Leo, on the loans?
Sure. Thank you for the question. Basically, the loans go down by EUR 15 billion this quarter versus Q1 2025, and it's basically driven by two impacts. One of them is technical and explains EUR 9 billion of the EUR 15 billion. This is basically an overnight loan to Banque de France, which was booked as a loan until Q1 2025, and now it's accounted as cash. The second
one, which accounts for almost EUR 5 billion, EUR 4.8 billion, is driven by the forex effect in the quarter.
Very clear. Thank you. Just to follow up, if I can.
As [levriere], you talk about the dependence on level of rates, etc., I keep thinking that some good NII disclosure with the sensitivities, the hedges, ALM, etc., would be helpful. Just something to keep in mind for the future. Thank you.
Thank you.
The next question is from Joseph Dickerson of Jefferies.
Hi. Thank you for taking my question. Could you just give us an update on the RWA trajectory? Because I think you've talked about 2024 to 2026 growth of 1%. We're currently flat at the moment. I guess, how do we think about deploying those organically in order of priority? Is it Ayvens, BoursoBank, and then the IB? Just to follow up on BoursoBank, more specifically on the point that you've reached 8 million clients, last year, you ran about EUR 245 million of customer acquisition costs, as you pointed out, as a contra revenue.
I guess, do you start to dial that back next year and the second half this year? I guess, what's the optimal level now of clients? Do you intend to grow it meaningfully beyond 8 million, or do you intend to grow inorganically like you did in the past with ING? I guess, a little bit of color on BoursoBank there because it's clearly inflecting in a big potential lever next year irrespective of rates.
Absolutely. Thank you. On the first question, I think I want to say a few things. First, we do have room in terms of organic capital allocation to business growth within that CMD guidance like you just implied. I'm just confirming that, and that's the spirit with which we operate.
Remember, in a management framework which we have quite drastically changed and in which we have a very, very big focus on optimizing capital allocation and on trying to do our best with every penny that we invest organically. You see here both the opportunity because there is room to deploy this capital across the businesses. I'll go into the second part of the question in a second. On the other hand, I will not change the management stance on the quality and rigor with which the capital is allocated. Again, while there is capital available and will be made available, is made available to businesses for organic growth, the standards of deploying it are unchanged. Don't expect everything else being equal, anything explosive, once again, from a growth perspective there, but do expect us to increase seriously, rigorously the allocation to the businesses. Which ones?
I think if I gave you today the list, I would tell you first the IB and F&A business, but once again with a big focus on the asset rotation and on being aware of the fact that the macro context, while resilient, right, clearly resilient with some uncertainties kind of abating recently, remains potentially challenging, with a pretty strong focus on risk management as well. Growth opportunity, but again, rigorously executed. I would tell you Ayvens, but Ayvens within, here again, a very clear mandate, which is not one of destroying value through a growth which is unhealthy. If you look at our performance and contrast it with the market, you will see that we have a very specific focus on making sure that our GOI generation there remains healthy and that we focus, right, on the balance between margin dynamics, risks taken, and growth opportunities.
It's very easy, as you know, in our businesses to generate unhealthy growth, and this is not what we're going to do. It's a little bit across all the businesses. I mean, KB, BRD do well and have room to grow in markets which are sound and exhibit healthy growth. On the retail side, the need for RWA today because of the backdrop that I gave you on the retail in France side, because of the macro backdrop, the need there is not very significant. That's for the RWAs. In terms of the BoursoBank dynamics, first, we will not slow down the pace in 2025 in terms of acquisition. It's a market which is a highly competitive market.
It's a market which is, if anything, competition is increasing in this market and maintaining our leadership, leading the market in terms of acquisition, and almost more importantly, in terms of client feedback and client quality. We're still number one in that regard in France with BoursoBank in terms of client satisfaction. We will continue to make these investments. I do believe that going forward, what we need to do is to find the right path for continued growth with more balance between the costs of acquisition, which are already decreasing and have been decreasing for a while, a focus on generating higher NBI per client at the same time as the clients mature, if you will, in the client base, but maintaining some of the competitive edge we have. That's basically the equation that we will have to solve for and which we will in the next few months.
Inorganic, listen, inorganic, since you brought up, I don't see right now any inorganic opportunities that would make sense at this point. Obviously, if they were to come, we would look at them, but again, with a lot of rigor and conservatism.
Thank you.
The next question comes from Sharath Kumar of Deutsche Bank. Mr. Kumar, your line is open, sir.
Sorry, I was on mute. Good morning. Thank you for taking my question. Firstly, a follow-up to the very last comment that you made on inorganic opportunities. Given that you're tracking well above 13% CET1, one of AVENS shareholders is in the midst of selling their stake. Is there appetite to opportunistically increase the stake here, given you view this business to be strategic? The second one, not a question, but more a request on BoursoBank.
I think it would be useful to have better disclosures to see the contribution from BoursoBank separately. Is this something that you're willing to consider? Thank you.
Thank you very much for your question. Hi. Starting with the second one, we're willing to consider anything that investors or the market community yourselves are putting on the table. For now, we're not planning on disclosing anything further now. As we go into 2026, we have a very clear commitment in terms of bottom-line contribution. We definitely will be giving you more color, at least at that horizon. What I can tell you today is that for H1 after 2024, where BoursoBank was profitable, H1 2025, BoursoBank is profitable, profitability being defined as above zero in terms of net to income.
When I say above zero, it's a number which is not material at the group level, but it's obviously quite a bit higher than zero, which evidences, and that's, I think, the important point, that while at the CMD, we made a very clear statement in terms of strategic vision for this business, which is clearly growth, right? For 100 clients that we acquire in the French market at BoursoBank, 10 of them roughly come from SocGen , and 90 of them come from our competitors. I like these maths very much. From this perspective, this was the statement. We had said that we would invest EUR 150 million of negative GOI. This was the metric that we had discussed at the time at the CMD. Of course, like with everything else, we tried to do better, right? We tried to do better.
As we saw a path to optimize both the acquisition costs and revenue generation at BoursoBank, we were able, actually, throughout the plan, and this is going to remain the case for the remainder of the year, to actually not spend that GOI. We actually made money throughout the cycle, so saving substantially more over the period. Saving substantially more than EUR 150 million. That's that, right? That's all I can say at this point. On the inorganic opportunities, it's important to again. Look at this as you have capital that needs to have a return that is healthy and that you can justify versus the other opportunities that you have. Today, we have, on the return to shareholders in the form of buyback, a certain level of ROI, which is high.
In terms of organic growth, we have marginal returns, which are very high again because of virtually unlimited, virtually, right, unlimited operating leverage. The opportunity of reinvesting in a portion of the minority stakes in Ayvens is one which obviously exists theoretically. At this point, we have not decided to do it.
Thank you.
Thank you. The next question is from Alberto Artoni of Intesa San Paolo.
Hello. Thank you very much for taking my questions. Just two from my side. The first is more strategic. Are you comfortable with the current asset of SocGen as of today, or are you willing to consider if you're not the best owner of everything, as you said in the past, or you think that the journey is pretty much done?
The second question is just a little bit more color on the cost of risk, given the uncertainty that we see at the geopolitical level, macroeconomic level. I think your remarks were quite constructive, but if you can just give a little bit more color on the numbers that actually are pretty strong on that front. Thank you.
Thank you. Hi. Thank you for your question. On the portfolio of assets, after what we've done, we feel today reasonably
Comfortable that we're a decent, if not the best, but very decent shareholder of most of the businesses that we either own or run within the mother company. What we committed to at the CMD, which is to keep a very close eye on the performance and on the strategic equation of all businesses, remains true. We will continue every single day, so to speak, to monitor the performance and the changes in competitive dynamics and strategic dynamics in our assets. We will make sure that if the parameters that I, you know, very often commented upon in this call, which are headline ROE, ROE versus cost of equity, amount of synergies, tail risk, etc., all these criteria, if a business were to fall outside of, let's say, what we target from this perspective, it will be instantly put in a situation where we would review our strategic options.
Clearly, at this point in time, we are very much towards the end of this adjustment process in terms of the business portfolio. In terms of cost of risk, giving you a little bit more color. Listen, today, within an environment which was of resilient growth worldwide, lots of uncertainty and lots of clients, issuers, and corporates, etc., being in a wait-and-see mode, we have not seen material deterioration in the asset quality or in the, let's say, the macro outlooks for the asset quality of our portfolio for all kinds of reasons. I mean, we do run, from this perspective, a very rigorous risk management apparatus and strategy. Origination quality is one factor. Clients have had opportunities through the inflation cycle to rebuild, somehow or increase their margins. They have had also access to liquidity, albeit a little more expensive, but they have had access to liquidity as well.
Overall, the parameters are still, frankly, we see them as very constructively across our entire portfolio, including in France, which shows good resilience. Now, while uncertainties have abated a little bit these past, literally, 10 days in terms of the whole tariff saga and the likes, we are still in a world where the risk of significant disruptions to international trade, to supply chain, because in the tariffs, the supply chain aspect is almost, almost more important than the straight trade considerations. We remain in an environment where the uncertainty, while lower than three weeks ago, is still high. From this perspective, I do expect some more prudent attitude, maybe a little less wait-and-see, but still some of that happening, which I also see as a stability factor in terms of the portfolio.
At this point in time, across the entire business portfolio that we have, retail, wholesale, we still are very constructive.
Thank you very much.
Excuse me, sir. The next question is from Anke Renken of RBC.
Thank you very much. I just have two small questions. The first is on the mix of your distribution of the 50%. Is the cash distribution in the first half a good indication for the mix between cash and buybacks for the full year? Secondly, on your capital path, you show the 8 basis points benefit in the capital ratio from regulatory benefits. Is there anything more we should be expecting? Thank you.
Thank you. On the regulatory first, you know the drill. The entire industry in Europe is subject constantly to all kinds of reviews by the regulators across all of the businesses. In the past, it resulted in a number of headwinds for the industry in terms of add-ons, etc. In essence, these add-ons are meant to be temporary. Temporality with the regulator is not exactly the same as with normal human beings. Things tend to take a lot of time, especially when it's on the removal of temporary add-on side. This time around, we got that the right way. You should not see these as substantial flows. Things will happen both ways, but these will not be substantial impacts to the overall equation either way. That's for that. If I got your question, because I had trouble hearing the beginning of your question.
If your question was 35% versus, why don't you take that, Leo?
Sure. In that regard, basically, what we wanted to be, it's conservative on this front, no? We want to have an interim dividend which is lower than the final cash dividend at year-end. Dividend policy has not changed in that regard. We have, you know, a balanced mix between cash dividend and share buybacks. The only thing that we did in Q1 is to be conservative on the interim dividend. That's why it was 35%, so that the year-end final cash dividend should be higher than the interim one. We have not changed our policy in that regard, I mean, with regards to the mix of cash and share buyback, which remained the same. It's balanced.
Okay. Thank you.
Thank you.
The next question is from Chris Hallam of Goldman Sachs.
Hi. I just have two left, two short ones. I guess on the buyback, when did you apply for approval? I thought that was happening after the FRTB question was settled, which I guess would mean that the approval was super quick. Is that correct? Did you learn anything from that process? Second, slightly tangential, but we have the stress test results tomorrow night. Anything you think we should look out for or consider for SocGen in particular or for the sector more broadly considering your EDF role? Thank you.
On the first question, I can't comment on the particulars, obviously. We try to be very precise in our communication, and what you described of our communication is a fact. Let me leave it at that. On the stress test result, I mean, same thing. We can't comment. It's going to come out tomorrow. Listen, considering just the helicopter view, normally, right, in an environment which, as we discussed throughout the call, remains resilient, not extraordinarily supportive but resilient, and with, I assume, the overall progress that the industry makes under the leadership of its supervisor, I would expect things to improve, right, not to deteriorate. That's all I can say, right? It's a theoretical comment.
Appreciate that.
Thank you.
The final question, sir, is from Pierre Chédeville of CIC Market Solutions.
Yes. Thank you. Two questions. First question regarding securitization operation. One of your competitors insists on the fact that it's a very useful tool to manage capital. I wanted to know where do you stand regarding this type of operation, if you have any program, any policy regarding that. Second question is regarding consumer credit. You mentioned that the situation is better, but at the end of the day, it remains quite small and not very profitable, compared to your main competitors in France or in Europe. I wanted to know if you have somewhere here a plan to develop organically or by external growth this business, which seems to be in a better shape. Maybe, as I am the final one, last question, do you have any equipment rate in mind regarding protection products in your French Retail Banking? Thank you.
Thank you. Thank you. On the securitization, the SRTs, very simple and clear answer. In our case, we use these techniques virtually only for risk management purposes, which is another way of saying that it does not have a material impact on our capital trajectory and is not intended to have one. We believe that, for all kinds of reasons, overusing this tool in terms of capital management is tricky, right? We don't want to engage in this, and so we are not engaging in this. That's for the securitization piece. On consumer credit, it's a matter of business mix. The performance improves, but it's a business which has been challenged, obviously, in France, by the whole usury rate issues, etc., compressing margins. At times where, post-COVID, actually, in the high inflation environment, the cost of risk has risen in the market.
Through normal adjustments, both in terms of origination criteria, better margins, no longer usury rate issues, the business is both growing at a very decent pace but also generating better margins and better returns. We have had a very good history in terms of profitability for this business in terms of ROE. While, obviously, there was a compression in the context I just described, it is now slowly converging back to the historical level. We're very comfortable with that business from this perspective. Today, we do not have any plans to increase its size within our business mix. It's a good business when well-run. We're happy with it. It's not on our exit list and has never been. It's not also an area of focus for anything inorganic, in particular. Last question. We do not disclose these equipment rates.
As you know, and I'm sure this is also why you're asking the question, it is a product which historically, we were later to the game, so to speak, on the protection products. We are focusing on the growth. We are, in terms of market rate, below the best competitors that we have in France, which we see as an opportunity for further growth in terms of fees and revenues in the French retail. Thank you.
Sir, there are no more questions registered at this time. Back to you for any closing remarks, please.
Thank you very much. Thank you for your time. I know you're very busy. Thank you very much for making the time. I wish you a nice summer, especially if you're taking a break. I do look forward to speaking with you again for Q3. Thank you very much again, and take care.
Thank you.
Ladies and gentlemen, this concludes today's Société Générale conference call. Thank you for your participation. You may now disconnect.