Société Générale Société anonyme (GLE) Earnings Call Transcript & Summary

Ladies and gentlemen, dear shareholders. I am delighted to welcome you to this year's Annual General Meeting. It's a very important moment for the company and for shareholders. For the first reason, of course, is the management transition that was announced last year. Frederic Oudea shall be finishing his term of office CEO. And if you follow the Board's recommendation, Slawomir Krupa will be replacing him, of course highly emotional moment because a new generation is the taking over. The second reason is the group's strategic transformation in 2022 and 2023. Let me revoke [indiscernible] Société Générale merger, which has now become reality, the acquisition of lease plan by ALD, creating a global mobility leader in the acquisition of the LeasePlan team, which will be a global leader in market research or [indiscernible], which has reached 5 million customers and in 2022, a withdrawal from Russia. Third reason, the economic and [indiscernible] circumstance to 2022, the central banks have deeply modified the interest rate environment. The economic prospects have in a sense to become darker with resilient underlying inflation and in the United States, confidence in the banking system went through a number of uphills. And then, of course, there are the challenges, the climate and the climate transition, the energy transition. But it's again, this background, we are organizing this AGM to evidence the robustness of Société Générale model and it's renewed strategic ambitions. It's now time to open this Ordinary and Extraordinary General Assembly as published [indiscernible] 2023. The provisional quorum is 53.41%, 413,942,477 shares i.e. 25,000 shareholders who are entitled to vote which is higher than the required quorum which is 1 quarter. The assembly is, therefore, entitled to the resolution -- all the various resolutions. All written questions and answers are available on the AGM website more about that. Around with me here on the stage to answer your questions are Frederic Oudea, Chief Executive Officer, Diony Lebot, Deputy CEO, who's term of office ends today but first of all, we shall discuss the results with Claire Dumas, CFO, then discuss the strategy with Frederic Oudea, CEO. A specific point will be dedicated to CSR to the energy transition with Diony Lebot, and . Jean-Bernard Lévy corporate governments, [indiscernible] who will -- whose term of office is also ending today and myself, also focus on compensation and benefits with the [indiscernible] committee and then we shall have a debate and vote on the various resolutions. We can now assemble as a [indiscernible] two persons who have accepted that under a power of attorney. Ms. [indiscernible] representative of BNP Paribas Asset Management; and Mr. [indiscernible] representing Amundi. I wan to thank warmly for having agreed to this and I propose that a secretary of this assembly, Patrick Suet, Secretary of the Board of be appointed. The Auditors were convened in accordance with legal regulatory procedures namely Mr. Micha Missakian from Ernst & Young and Jean-Marc Mickeler from Deloitte. Finally, I have list in my presence, the usual documents on the desk, a list of which is displayed on screen. let me add that the documents and legal information prior to this meeting were put on the website in regular manner and made available to the shareholders either online or at the corporate offices of Société Générale. These debates are streamed live on the Internet, will be accessible later on the Internet. Proceedings can also be followed by phone. We have conducted, as usual, a survey of our shareholders that show your keen interest in the results, the strategy and the dividends and then risk management, the other topics, the appointment of management, CSR, new governance, all of these issues will be discussed today, and we will have plenty of opportunities to debate on them for the proper organization of our debate. I would like to point out that the employees are -- have the entrance of this room to answer any questions you may have as customers. So if you have personal questions about your bank account or relationship with the bank, you can talk to our employees, at the entrance of this room. And although this assembly is being broadcast on the Internet, we shall not be broadcasting any images of any attendees, including those who will be asking questions. Now it remains me to give the floor to Claire Dumas, Chief Financial Officer, who will present the results for the year 2022. Claire?

Thought there would be a musical transition. I was waiting for it. So ladies and gentlemen, I would first like to review the financial results for the year 2022 and then comment -- briefly comment the results for Q1 2023, which were posted on May 12. As you can see on this slide, the group publish a strong underlying net income of EUR 5.6 billion, equivalent to underlying profitability ROTE of 9.6%. The reported net income reached EUR 2 billion due to the financial impact of the disposal of the Russian business, after the break of the war in Ukraine, the group decided to do so in an orderly manner within a few weeks and this meant that Q2 2022, suffered a negative impact of around EUR 3.3 billion restated from the underlying results. The capital impact of the disposal remained contained at 20 basis points. The good performance of the underlying results is explained by very good momentum in the business lines with revenues up 9.3% versus 2021 at EUR 28.1 billion. At the same time, the group continued to be disciplined in its cost management, resulting in an underlying gross operating income of over EUR 10 billion. The cost income ratio, excluding the contribution of the FRU, follow [indiscernible] was 61% below the initial guidance provided in late 2021 to 2022, which was anticipated to be between 66% and 68%. Cost of risk also remained low at 28 basis points despite the impact of the Ukraine war on the Russian portfolio, which is under the indicative level provided in 2021 to 2022, which was between 30 and 35 basis points. The load of risk was due to low loaded full rate, 17 basis points, which evidences the quality of assets in the portfolio and a very prudent provisioning policy, which led the group to increase its stock of provisions which reached EUR 3.8 billion. The Board of Directors has decided to propose a total distribution of approximately EUR 2.25 per share, which break down as follows: a cash dividend of EUR 1.7 versus EUR 1.65 in 2021 and a share buyback program for approximately EUR 440 million, equivalent to approximately EUR 0.55 per share based on a number of ordinary shares. This records to share buyback. There's a very common practice in the banking sector because [indiscernible] our shareholders to benefit from its [ relutive ] effect. The group's capital ratio was 13.5% at December 31, i.e., 420 basis points above regulatory requirements. We now move on to the next slide, you have a overview -- a dynamic overview of the evolution of [indiscernible] as I just said, the very good underlying performance for 2022 was primarily due to an excellent contribution of the business lines, evidencing the quality of the group's portfolio and franchisers. Financing & Advisory and market activities posted record performance with revenues over EUR 10 billion, up 14%, this excellent contribution is evidence of the relevance of the strategy started in 2020 with the repositioning of the market activities and investments in financing, advisory and transaction banking. ALD also reached an all-time high up by more than 40% versus 2021, driven by strong commercial momentum and continued strong demand for used vehicles. International Retail Banking and Private Banking also performed very well with, in both cases, double-digit growth. Finally, despite the initial effects, the specificities of the French domestic market and the net interest margin, French retail banking business posted satisfactory revenues in parallel with the completion of preparatory work for the merger of Société Générale and Credit du Nord constant scope, revenues were up more than 9% versus 2021. Costs were only up by 4.5%, and the cost income ratio, excluding contribution to the FRU was down from 69% in 2019 to 64.4% in 2021 and only 61% for 2022. This was, of course, reflected by a very strong increase of earnings underlying gross operating income, EUR 10.1 billion in 2022, up 19% versus 2021 with 40% versus 2019. Let's now look at the results for Q1 2023. Again, robust results in Q1, the net underlying -- underlying income was EUR 1.5 billion, equivalent to an underlying ROTE of 10.7%. On a published base, the [indiscernible] base, net income was EUR 868 million, up 5.7% compared to Q1 2022. As of 2022, the performance resulted from dynamic revenues from the business lines, slightly up versus 2022 at constant scope -- exchange rates. 2023 will be a transition year for retail banking in France. The interest margin is temporarily impacted by the end of the TLTRO and the specificities of the French domestic market, the [indiscernible] interest rate and the rate of [indiscernible]. There was also a strong growth of ALD of International Retail Banking in Boursorama again, repeated -- repeated great success in banking and wealth management. And despite the inflation, costs remain under control through the pursuit of a very highly disciplined cost control within the group and a lower contribution to the FRU fund. And therefore, excluding the FRU, the cost income ratio is 60.5% below the target, which is 66% to 68% as stated for this year. In line with 2022, the cost of risk remains low at 13 basis points over the quarter, with limited defaults and no significant deterioration of the portfolio. This led the group to review downwards its annual forecast for the cost of risk, which are now set at less than 30 basis points for 2023. Finally, the core Tier 1 capital ratio of 13.5% at March 31 remains more than 400 basis points above regulatory requirements. In terms of cash, the group has a granular deposit basis which is healthy and diversified up 0.7% since Q4 2022. The short-term liquidity ratio, so-called LCR has strengthened at 171% in March versus 141% at, Q4 2022. Thanks to high liquidity reserves, almost EUR 300 billion, around 1/3 of the funded the group's finance balance sheet and a program financing program, which has made great progress at more than 70%. Société Générale can therefore, leverage a robust balance sheet and great liquidity profile. Now over to Micha Missakian on behalf of the auditors.

Ladies and gentlemen, on behalf of the auditors, I would like to discuss the consolidated and annual accounts -- document, you were handed. The central purpose of our mission is to obtain reasonable assurance about the regularity, sincerity and loyal picture presented by the accounts and the absence of -- and therefore, we certify the accounts presented to the Board. There are a few key points in the report, the risk -- the significant analogy risk, which, according to our professional appraisal were the most important in the audits. Key points in the audit, consolidated accounts and the individual accounts are the evaluation of depreciations on customer credits, the recoverable nature of taxation in France, the risk of regulatory, legal or arbitration, the valuation of complex financial instruments, IT risk connected to market activities. Key points in the audit for the consolidated accounts namely the coverage of fair value based on the portfolio of retail banking in France, assessments of acquisition gaps and reevaluation of the residual value of leased vehicle. Key point in the audit on individual account. The evaluation of participation and -- participation and stakes in associated companies. We have no further observations on the sincerity and the consistency with the consolidated gaps and for the individual accounts, we have no further comments to be made based on legal requirements, notably for other information communicated to the shareholders, namely the report about corporate governance and the management report. Now briefly, our special report about the regulated conventions for fiscal year 2022. We must communicate based on information provided to us, the characteristics and the central modalities and motives guaranteeing the interest of your company of the conventions we may have discovered or been informed about without needing to state an opinion about the validity of about the opportunity. We obtained no opinion over the previous fiscal year or no other information about conventions that would have been entered into previously. Thank you for your attention. We will now move on to strategy and I will now give the floor to Frederic Oudea.

Ladies and gentlemen, dear shareholders, I'm very happy to be with you today. This is a very touching moment formally as this is my last meeting as Chief Executive Officer of Société Générale. Before starting my presentation, and making with you a quick assessment of my 50 years and in particular, this last year. I'd like to thank you for the confidence and support that you have kindly granted me throughout these years. I must admit that 50 very intense year in an environment marked by profound disruption, many large-scale crisis of contracted by mandate, the [indiscernible] crisis and the financial crisis in 28 . The green debt crises first. And then more generally, the European [indiscernible] 2011, Brexit in 2016, COVID-19 pandemic in 2020 and 2021. The outbreak of the war in Ukraine in 2022 which is still going on today. Most structural changes that also occurred on the regulatory front, with Basel III regulations, the establishment of the banking union in 2014 and the so-called Basel IV rules about to be implemented. And the more global strengthening of requirements in the various compliance areas. Clearly, the rules of the game changed entirely if I may say so between now and the [indiscernible] office. Secondly, on the technological front with the phenomenal progress [ and ] connectivity. The immersion of the past. the technologies such as artificial intelligence and the subsequent development of new uses and consumption of banking services. Lastly and thirdly, from a social environmental standpoint to the amplification of climate change, the strengthening of protest movement and the collective awareness of the need to build more ecological and inclusive development models. All throughout of my term of office, I have solved to bring the group into this new world, managing emergency situations of course but always putting the long-term interest of our company first without compromising my values and my conviction. This was done in 3 stages. The first period from 2008 to 2011 -- 2012, was the time of the management of systemic and specific crisis and their impact on the banking sector and more specifically on our bank. A second period from 2012 to 2019, which was on the one hand the time of remediation with adaptations and regulatory framework and the segment of our disputes and also the time to look to the future with the launch of strategic thinking on each of our major businesses. It was particular during this period that we will focus our business portfolio decided to accelerate the development with Sarama to make it the champion of online banking in France. And I noted ALD on the stock market to give it the means to consolidate fragmented market in order to make it a world leader in the responsible mobility sector. And the third period of 2020 to 2023, marked by the return of unprecedented crisis but also by the realization of our ambitions and our strategic differentiations. First of all, the emergence of a unique retail banking model in France. In 2022, we first took steps in the project to merge Société Générale and Credit du Nord networks. This enabled us to complete as planned the legal merger on January 1, 2023, and to launch a new retail bank in France under the SG brand. It also allowed us to successfully complete the migration of the Credit du Nord banks to the Société Générale IT system with the second and last IT migration successfully completed on 13 and 14 day last. To help you to better understand the stakes and the controls of this project, I suggest that you should have take a pause and watch a video together. [Presentation]

As you can see, a project of considerable scope. A project of considerable scope and requirements that you have seen which has been perfectly executed. I would like to commend Sebastien Proto and all the teams which contributed towards since its launch in October 2020. At the same time, we continue to accelerate the growth of Boursorama, in particular to the partnership agreement with [indiscernible], Boursorama won a record number of customers in 2022 with 1.5 million new customers. With 5 million individual customers today, Boursorama is the undisputed leader in online banking in France and still has considerable potential for profitable growth. It's a real bank with a balance sheet of EUR 65 billion, offering all online banking services. I'm ready to bet with you that Boursoram will have 8 million to 10 million customers in France within a few years and will be a major contributor to the group's financial results with a very good profitability. The group now has a unique [ operate ] in the French retail banking market with, on the one hand, SG, a bank that is close to the regions with 10 million customers, including companies, merchants, self-employed entrepreneurs and individuals offering the best mix of human expertise and the power of digital technology. On the other hand, Boursorama, a 100% online bank leader mix market, the cheapest bank and with a very high level of customer satisfaction. This offer is very complementary with a the real potential for growth and differentiation. Although, of course, there is still a lot of work to be done to put it to glory, the business model and reap the full benefits of developments underway. Secondly, realizing our ambitions in sustainable mobility. We announced at the start of 2022, the proposed acquisition of the lease planned by ALD, which is the largest acquisition in the group's history. We finalize it yesterday after having obtained all the necessary regulatory approvals and secured financing. I would like to welcome all the employees of this plan who are thus joining Société Générale group. We'll be able to start the integration phase, taking advantage of all the synergies and complementarities between these 2 companies and build this world leader in sustainable mobility, capable of driving the transformation of the sector. We have long term [indiscernible]. This company now manages 3.3 million vehicles and will support both corporate and individual customers in the profound transformation of the mobility sector. I'm thinking in particular of the change in usage from ownership to used up cars and the shift from internal combustion engines to electric vehicles and the LeasePlan over the next 15 years has tremendous prospects for profitable growth and can establish itself as one of the reference ESG stocks on the European market. Thirdly, realizing our ambitions in Corporate Banking and Investor Solutions. We announced last November, the signature of electric intent with Allianz [ bench ] time, confirming our joint project to combine our respective equity research and cash equity activities within a joint venture called [ bench bank ]. This operation is to the credit of Slawomir Krupa who initiated it and has been working on it for 2 years. He will be charged of finalizing it. We are moving for the determination of this project, which, if successful, will create an undisputed leader in the entire equity business, broadening the value proposal for our issuer and investor plans. More broadest speaking, I'd like to emphasize the remarkable and recurring performance of our Corporate Banking and Investment Solutions activities over the past 3 years. This is the result of the model adjustments we have made in recent years. At the same time, as all the strategic and structural moves, we are now exiting in an oddly fashion from all our activities in Russia. This exit had a significant cost as you may have seen in the results for 2022, but a very moderate impact in terms of capital, which in no way handicaps the future of our group. I believe that this was the right decision. In view of the growing uncertainty about the outcome of this war and the risks of all times that maintaining our presence could have entailed. Moreover, it was perfectly well exclusive. To conclude with the strategic aspect and also bear in mind, the profound and organic transformations of our OpEx international retail banking, insurance and financial services businesses which delivered the market performance in recent years. We have laid the foundation for a profound renewal of our business model. We have embarked upon a number of differentiating and value-creating projects that I believe, enabled the group to achieve its profitability goals. This took time, but I'm convinced that nothing solid and sustainable can be built in a few quarters in the banking business. I remain [ lucid ] and this [indiscernible] still a lot to do, firstly, to complete each of these projects in order to meet the full benefits, but also accelerated our digital transformation and operational efficiency improvement initiatives and to commit the bank and its ecosystem even more intensely to the climate transition. We are only at the beginning of technological and digital transformations as well as transformation from labor to social and environmental responsibility. They will be a strategic thread running through the next 10 years. They will require us to continue to develop and deploy breakthrough business models. We are perfectly capable of doing this. Boursorama and [indiscernible] perfect example. And I know that Slawomir Krupa, my successor, and this new management team have all the motivation and energy to meet these new challenges. Let us now take a look at the financial picture over the past 15 years controlled what I said up here. The bank has not stopped growing. The group's revenues grew by plus [ 32% ] between [ 28 ] -- 2008 and 2022 despite adjustments made to our business portfolio. Thanks to good cost discipline, the cost income ratio improved significantly from a 71% at the end of 2018 to 61% if the neutral contribution to the single resolution part is neutralized. We also benefit from the discipline of origination with a low cost of risk and considerably higher [ ex-NPA ] provisions. I would remind you that at the end of March 2023, we have nearly EUR 4 billion in provisions on healthy outstandings. As a result, in 2021 and 2022, we delivered the best operational and financial results in the history of the group. If we set aside, of course, for 2022, the one-off impact of the exit from Russia. The bank's balance sheet has also strengthened considerably since 2008. Our Solvency and liquidity ratios have more than doubled over the period. The bank is now in good shape with core Tier 1 ratio of 13.5% and liquidity reserves, Claire said, up almost EUR 300 billion, including more than EUR 210 billion in cash. Now in this context, tangible net assets per share increased from EUR 38.3 per share in 2009, the first published figure to EUR 62.3 per share at the end of 2022. Undoubtedly, there is a lot more money in the [indiscernible], if I may say so. Despite all this performance, the [ station ] has stock remains discounted and subject to productivity. This is a frustration for me and for you. The markets are not yet convinced of the intrinsic value of our business model and the potential of our assets. I see several reasons for this beyond the fact that investors who are often burned their wings in the last 50 years in the European banking sector, [indiscernible] looking for maximum short-term visibility and the return in the form of capital distribution. The first reason, the weight the bond market activities. We are the European listed bank with the largest exposure to market activities. I admitted, I did not want to take decisions to reduce these activities, which over the long term would have been detrimental for our future. Second reason, the retail banking market in France is not the most attractive in Europe. It is very protective for customers. Much less so for shareholders. When compared to other European markets analysis here, too, we are here been listed bank with the highest proportion of revenues coming from this market. I remind you that there are very few listed banks in France. And lastly, the third reason, the need to extend the good track record of the past 3 years to put a [indiscernible] sure and our disciplined execution and our ability to have a smooth financial track record without any bad surprises. I am convinced that this discount will be reduced over the next 2 to 3 years if the group successfully completes current strategic initiatives, and continues on a solid recurring and predictable earnings trajectory by achieving its profitability targets. The last topic I'd like to discuss with you today is group culture. Throughout my tenure, I sought to strengthen the culture of our company to make it more innovative, more responsible and more mindful of the sustainable satisfaction of our customers in line with expectations of supervisors and regulators by building on the values of commitment and team spirit that we hold there. I did this by making sure to embody this culture myself by leading, deciding and acting with integrity, by giving the utmost respect to each employee and by measuring the value of their contribution. By keeping them the right to express themselves without fear, all [ trait ] and by creating a culture of transparency and fairness by serving -- without ever serving myself with the frugality required in these times of crisis. The many testimonies I have received in recent weeks of our customers, employees and partners give me hope that this healthy culture has deeply permeated our group. This culture is an asset for our company and an indispensable condition for its future success. It fosters indeed the trust of our stakeholders who are so precious in our industry. To conclude, I have experienced an extraordinary human adventure at the Head of Société Générale group which has been both a heavy responsibility and a great honor. We are being to a difficult and demanding times with many challenges, but we have come together to achieve great success together. As a result, we have given the group, the means to hold the prominent place in the economy and to look towards the future. I'd like to thank our clients for their trust and loyalty. It has been an honor to serve them on a daily basis and the pride to contribute to the success of their projects. I'd like to thank all the shareholders for their trust throughout these years. I would like to thank all the employees of Société Générale for their remarkable work, their resilience and their desire to undertake, which is constantly renewed. You have my full appreciation and express both my admiration and all my affection. I would -- particularly like to thank my successive deputy general managers and my executive committee for their unfailing support and the invaluable contributions, you know how much I value each and everyone. Finally, I'd like to thank the Board of Directors and the Chairman, Lorenzo for his trust. I would like to highlight the exemplary and calm succession process in the interest of our company. I'm pleased that an internal candidate has been selected, Slawomir, is whom I hope you place your trust, is an experienced banker, very much attached to the group and with strong international experience. He has all the skills needed to manage our company and continue its virtuous path. The orderly transition process enabled the company to prepare and organize his new management team. He will therefore be able to start without wasting anytime and extend the transformations underway, while proposing to the Board, the new strategic directions that he deems necessary in the world that will remain uncertain and difficult. I wish him and the new management team every success in this new mission. As far as I'm concerned, I leave with a mixture of emotion, humility and gratitude with the feeling of having accomplished my duty and of having given my best to Société Générale. Thank you for your attention.

Thank you, Frederic. Diony Lebot will now tell us about the CSR strategy. It's a special item in the agenda in keeping with the AMF's recommendations. Diony Lebot, he's also in charge of an assignment over the issue will state his opinion.

Greetings to all. Société Générale CSR ambition is to encourage the environmental transition while developing our local positive impact through a strategy deployed across the group. I will talk about the actions we've implemented and we'll document a few examples or a short film illustrating the way we support our customers on a day basis. In the face of the environmental and social urgency. We're accelerating the implementation of our CSR ambition as presented last year. It is built around 4 strategic pillars. First pillar, the environmental transition. Our objective is to support all our customers in their transition with innovative solutions to meet their new needs. Second pillar, the development of communities. It's at the very heart of our action in the field. Every day, we work with those who have projects and we support positive transformation, both social and economically in local communities. Third, we have a responsibility as an employer. We foster working environments that are attractive, inclusive and engaging, and we manage the implement and career development of our employees responsibly. Fourth pillar, our culture of responsibility. As such, we maintain the highest standards of governance. We ensure full compliance with regulations and we act in accordance with our corporate purpose, which reflects our values and guides our actions. Our CSR ambition is thus fully aligned with our corporate purpose to build together with our customers more environmental and inclusive development models by providing responsible and innovative financial solutions. In 2022, we made our transition towards [indiscernible], an inclusive economy. We've contributed to sustainable finance, EUR 300 billion between 2022 and 2025. We've already exceeded EUR 100 million at the end of 2022. All of our business lines are involved in developing our positive impact on local communities. We support and facilitate access to renewable energy. As a pioneering bank in this field, a great number of projects being dedicated to this. We are involved in sustainable mobility with charging infrastructure and the electrification of vehicle fleets through ALD, our subsidiary. We are developing our positive local impact by facilitating access to healthcare or supporting local communities. The creation of the new SG Bank in France with a presence in 11 regions is a perfect reflection of our commitment to strengthen our positive impact for our clients. To transform this bank, we have initiated an ambitious CSR plan called Building Together. We built a major training plan for all of our employees, 65% of them have already completed ESG training and more than 10,000 people have taken part in the climate fresk. This plan includes setting ESG targets for a large circle of managers or implementing incentive schemes to encourage the origination of sustainable financing. The bank now has significant resources to ensure the success of its transformation plan and has also launched a program called ESG by design to operationalize the transformation. This program allows the deployment of methods and tools to build in ESG, to build it into the group's operational processes and to meet the ECB's regulatory requirements. Let me now briefly focus on our climate strategy and the progress we have made. The environmental transition is a complex subject. And we are convinced that it requires concerted and collective approaches. It is a huge challenge, both in terms of climate, economy, social and technological. By trying to reconcile short-term issues with a proactive long-term vision, we are confirming the climate ambitions set for ourselves through 3 priorities: one, support our clients in their environmental transition; two, manage the risks associated with climate change; and three, manage the impact of our own activity on the climate. First priority. Supporting our customers in their transition. Companies who are engaged in transition are facing investment needs that are unprecedented. Several billion euros a year over many years, we provide individualized support to our clients. For large corporates, we have a range of solutions in sustainable finance. We have initiated a program to review our mandates to work with each individual sector to help with decarbonization. More than 400 employees take part in developing a holistic approach that considers the entire value chain of our customers. This sectoral experience of our teams is a major asset to provide innovative solutions that are tailored to each sector. For our SME customers, we have expert advice that can be provided with specific systems such as environmental and social loans with dedicated customer parts. For our household private individual customers, we can help them with funding energy renovation work on their homes or the acquisition of an electric vehicle. We are also working on innovation to build an innovation ecosystem that addresses our customers' needs. Second priority, managing the risks associated with climate change both the physical risks that have an impact on the assets we finance, but also the transition risks endured by our customers. We are strengthening our climate risk management team with an improvement of assessment tools to the exposure to re-transition risk for a client, an economic sector or a country and the consolidation of our stress test system. Third priority, managing the impact of our own activities on the climate. Within the group, we have initiated a proactive approach to reduce our emissions. We have set as a target a 50% reduction between 2019 and 2030, by acting on the energy we require for our offices, for our IT, for our travel, be it by air or by car. In 2022, we reduced our own emissions by 35% versus 2019 in line with our target. With regard to indirect emissions, namely those of the customers we finance and which are most the origin of most emissions assigned to banks. We are resolutely committed to decarbonizing our financing portfolio. We have goals under the year net zero banking alliance. We accelerated the alignment of our credit portfolio with a strong focus on the energy sector, and we have set new intermediate targets. Reduction of our exposure in 2025 versus 2019. Our exposure to oil and gas production, previous target was minus 10%. A 30% cut by 2030 versus 2019 in absolute carbon emissions from oil and gas production and end use. And for the power generation sector, a reduction of carbon intensity to 125 grams of CO2 per kilowatt hour in 2030. The target was further strengthened in 2022 from 163 grams per kilowatt hour in 2030. In the coming months, we will continue to work on these targets and set up new goals that will be made public, notably in the field of public transport, real estate and construction. We're also strengthening our sectoral policies with commitments to help to preserve biodiversity, as signatures of the Act for Nature Alliance and through our participation in international initiatives, such as Task [indiscernible] on nature-related financial closures, [ TFND ] or biodiverse pledge. I would like to tell you how much at every level of the group's governance these issues are fully embraced. And the Board of Directors, of course, we have renewed Jean-Bernard Levy's position this year. Over to him in a moment and extended all of that to CSR as a whole. Top management has also made this a priority area for action. And as I'm allowed to hand over to the new management team, I remain pursuated that CSR will remain at the very heart of our strategy because I know how deeply committed Slawomir Krupa and his team are committed to ensuring that it is built into everything we do. CSR will remain at the very heart of our purpose and our banking business. Thank you very much.

Thank you, Diony , for your commitment throughout all of these years. Now over to Jean-Bernard Levy.

Thank you, Mr. Chair. I would also like to thank Diony and greet all of the shareholders here. So I have been entrusted with the mission in the field of CSR and my mission is to assure you that we are fully embracing this within the bank. After the Paris accord, the COP21, Société Générale became very much involved in environmental issues with a focus on the carbon footprint of its financing and sectoral policies to work on the environmental and social impact of its business. The bank laid out a number of figures and targets for high emission sectors such as coal or oil and gas production. It also placed a ceiling on the carbon intensity of ALD vehicles and its financing related to power generation. The target figures for production of coal, oil and gas would further strengthen in 2022 and the bank is preparing for further cuts for the most emission-intensive sectors such as transportation, real estate and steel. For its own activities, Société Générale has committed to reducing its CO2 emissions by 50%, as you have just seen between 2019 and 2030. The bank can leverage a specific governance implying involving the Board of Directors, general management in all of the business lines. Since the start of 2023, the Board of Directors strengthened the system. The CSR strategy is decided by the Board of Directors based on a proposal from general management, reviewed by the Board's ad hoc committees and I attend each of these committee meetings when the CSR is on the table. CSR must involve everyone who works for the bank. Major transformation program has been initiated based on a proactive training policy. This program is complemented by the ESG by design project, including many operational implications. CSR is a vast undertaking, and the transformation will continue. The sectoral alignment policy and its extension to all industrial sectors and to the main service activities will be continued. However, understanding of climate risk remains very difficult ask. Regulations and the definition of key indicators have not yet been stabilized while the banking sector is trying to organize itself to meet the needs of public opinion and regulators. The bank's positioning CSR issues is a major strategic challenge with risks and opportunities. I believe it is an asset for the bank in terms of differentiation vis-a-vis the stakeholders, namely customers, shareholders, and current and future talent is employees. Thank you for your attention.

Thank you, [indiscernible] and Jean-Bernard. We're now going to proceed with a focus on corporate governance in the universal registration document on Page 69 et al, you have a report about corporate governance. You will find details of the Board's committee, work report and as well as the report by the Chairman. In 2022, the Board of Directors convened 18x with 97% attendance, not taking into account committee meetings, nonexecutive director meetings and time dedicated to the strategic seminar. A lot of time was dedicated to strategy to the Crédit du Nord and Société merger, [indiscernible] to Russia and to the project with AllianceBernstein. The Board of Directors also approved the bank's CSR strategy and approved its extra -- its nonfinancial performance declaration. It decided that the CSR strategy would remain purely under the remit of the Board that the committees would prepare work in keeping with their own competence and that the [indiscernible] role would be extended to the entire CSR in cooperation with the general management. You will find in the universal registration document, Page 104, a summary of the evaluation of the Board's proceedings. It's very positive, both, in terms of composition and in the quality of its proceedings. This research was conducted by an independent consulting firm. We also made sure that the education of Board members in terms of accounts, accounting rules, cybersecurity, artificial intelligence, compliance, particularly anti-money laundering and naturally CSR. As regards to my own personal role, I was actively involved in contact with the regulators and met with international shareholders and investors, notably in preparing for this meeting. I must now tell you how the Board proceeded in order to suggest [indiscernible] consultation was initiated in late 2022 with assistance from an independent consultancy firm. I worked on this with [indiscernible] and the appointment committee and corporate governance. Nonvoting directors participated in this. Once the profile was defined, research was conducted, both, in-house and externally, both, in France and elsewhere. In September, 2 candidates were selected and the appointments committee made a proposal approved unanimously by the Board of Directors. The 2 final candidates, both originated from within the group, illustrating and evidencing the great quality of the men and the women who work for us in September under [indiscernible] authority. The transition ran as smoothly as possible. And Slawomir Krupa constituted his own team, selected is Deputy General Manager, Deputy CEO, and announced the composition of his future executive committee. Beyond the man, it's a team that the Board of Directors proposes that we support by approving the resolution appointing Slawomir Krupa as Director. Now is the time for him to introduce himself. Slawomir Krupa, you have the floor.

Ladies and gentlemen, dear shareholders. Many thanks for attending today, and I would warmly like to thank Lorenzo and all directors of our group and particularly the appointments and Corporate Governance Committee and its Chairman, [indiscernible] for the trust they're placing in me. Throughout the process, they have listened to my presentations, all the future prospects that I wish, that I have the ambition for Société Générale, the outline of my future action. And after this rigorous succession process, I'm therefore soliciting, dear shareholders, a vote of confidence to be elected as a Director of the group in order to then become Chief Executive Officer. I am fully aware of the honor and responsibility that comes with this appointment. I am the man of a single bank, Société Générale. I have dedicated almost my entire professional life to this bank. I joined almost 27 years ago at age 22. First at the [indiscernible] General, where I worked across many business lines on every continent. I then developed the financing and advisory business with our major corporate accounts before heading as you know, our investment banking business in the U.S. and since January '21, the Investor Solutions and Corporate Banking as Deputy General Manager. Société Générale has driven my professional career, and it is particularly meaningful because I tend to believe and I know that a great many of us do in this room that our bank has a sole that makes it different from any other different, different for its 117,000 employees and 25 million customers. And that is something I wish to replicate with all my teams. Before me, of course, many leaders for the past 150 years have with great talent and dedication helped to build this bank. And I feel that I fit in to this very long chain as will do all of those who will follow us. So I am now ready to take over from Frederic. As the Board said, the Board gave itself enough time to ensure a seamless transition. I have also -- I'm also proposing an excellent team that is ready to take charge. The general management team will just have 2 deputy CEOs, Frederic and Pierre Palmieri. The Executive Committee, which I'm going to be creating, its composition was made public in March, includes some wonderful professionals who are deeply attached to the Société Générale culture to which myself, as Frederic and others are deeply attached. We have new people with new ideas from other walks of life. And the quality of our management's team evidences the wealth of competence and the attractiveness of our group, and I intend to strengthen that attractiveness. I'm also hugely proud that there should be as many women as men in this team, which is the first for a European listed bank. You all know what my priorities are. They are what I have presented to the Board of Directors. This new chapter that we wish to open together will be based on our 2 fundamental strengths; our teams and our clients. We will have 3 priority strategic objectives, driven by a tenacious ambition to perform sustainably and to obtain a better share price. And you as shareholders can entrust me with this. And then the quality of performance for our road map, the road map that will be presented in September and for all of the ongoing strategic projects, which we have discussed throughout the day. Our new retail bank in France, the development of [indiscernible], leader of online banking in France, the creation of a new global leader in mobility creation with AllianceBernstein of a global leader in research and cash -- equity cash and the deployment of a determined and responsible ESG policy and the structural improvement of the group's profitability will also be a key priority. These principles and targets are all the more important that they are a clear compass in a banking world and macroeconomic and geopolitical world that is increasingly confused. I am well versed in the science of the financial markets and therefore, can measure the huge responsibility that lies ahead and the challenges that banking groups will need to continue to face. If you elect me as a director, my team and myself will dedicate all of our energy with audacity and passion to the future of the bank. I would like to thank by -- to finish by thanking Frederic Oudea for his 15 years of leadership and his personal support for my person in the years, also to [indiscernible], I have worked with her for many years and her commitment to the group has always been exemplary. And I am also thinking of Sebastien Proto, who also worked very hard on the merger of the 2 banking networks and the IT handover process. Many thanks.

Thank you, Slawomir. In terms of the composition of the Board of Directors, 2023 is marked by a number of major changes. And now let us listen to Gerard Mestrallet, who is Head of the Compensation and Corporate Governance Committee.

Ladies and gentlemen, dear shareholders, in addition to Frederic Oudea, 3 directors are now reaching the end of their term of office. [indiscernible], a director since 2011, is reaching the end of a third term of office, a member of the Audit Committee and the Risk Committee, member of the U.S. Risk Committee. [indiscernible] brought a valuable input to the board and her outstanding legal expertise in -- at a time when it was particularly welcome. She was perfectly assiduous. Her contribution is recognized by all. She must today give up this because she affected by the rule of 12 years that would lead her to lose our independence. As a replacement, the committee assisted by a consulting firm proposes Mrs. Ulrika Ekman. Like [indiscernible] herself, she is a legal expert, a former partner of one of the greatest American law firms. She sits on the Board of Greenhill, an American Financial Company. Mrs. Ekman, could you say a few words to our shareholders, as an introduction?

Thank you, Mr. Chair. Ladies, gentlemen, dear shareholders. Ladies and gentlemen, members of the Board. It is a great honor for me truly, that my application to become a director to be submitted to you. I am aged 60, I'm Swedish, but I have lived in the United States for a long time. I am very keen to contribute to the Board of Directors at Société Générale. My experience in corporate management in highly regulated environments, particularly in the financing industry in the U.S., for which I worked for a great many years. I also have significant legal and corporate governance experience. And in addition, I have sat as director of many other companies. But as several of my term of office as director are soon to end, I can assure you that my priority will be my role as a faithful Director of Société Générale. Many thanks in advance for your trust.

Thank you, Ulrika. A second renewal is coming up as Juan Maria Nin Genova does not wish to continue until the end of his term of office in 2024. The Spanish government has indeed appointed Juan Maria as Chairman of ITP Aero. And he considered that he would not be sufficiently available to occupy his position as a Director of Société Générale, which is highly demanding. Again, I cannot say too much about the contribution that Juan Maria has made to our Board, a great banker, a great business leader. [indiscernible] of Retail Banking. He was a colleague we listened to very much notably when merging [indiscernible] with Société Générale. After extensive research with an outside consultancy, the Board of Directors on proposal by the Appointments Committee has selected a candidate who fully fits the profile. A woman who is familiar with retail banking and has significant experience in technology, in digital and mobility. Beatrice Cossa-Dumurgier, a former employee of BNP Paribas and BlaBlaCar, Chief Operational Officer of Believe, is being proposed. She also has significant experience as a director, including for Group Casino. Beatrice, could you introduce yourself?

Many thanks, Mr. Chair. Ladies and gentlemen, dear shareholders, dear directors. It's a great honor for me to present my -- to apply and to present my candidacy. It's true indeed that I work in tech. I worked for the Believe Group, which is the fourth global actor and first independent actor in digital music. My prior position was the same one at BlaBlaCar. But prior to that, I worked for 20 years in the financial sector for the French treasury at the Ministry of Finance. And then 15 years will BNP Parabas, essentially in retail banking and consumer loans and for general management. I was COO for the retail arm of BNP Paribas, which covers all of the banks in the Eurozone as well as banks in Turkey, North Africa and the United States. I pushed for the digitalization of its model and launched Hello Bank. I was in charge of business unit called Personal Investors [indiscernible] with a presence in Europe and India. And while at BNP Paribas, I was administrative for a number of banks, BNL in Italy, [indiscernible] and Turkey and Personal Finance. [indiscernible], a number of subsidiaries of BNP Pariba. I was also Independent Director of [ SNCF Mobilite. ] I currently sit on the board of [indiscernible] and Casino, and I would be delighted to dedicate my energy commitment to Société Générale. Thank you very much.

Thank you, Beatrice. And my replacement because after 2 mandates, after have been co-led the selection of the new General Manager, it seemed to me that it was time to leave the place. The [indiscernible] was Chairman and CEO or Managing Director of a listed company, again, a complicated [indiscernible]. I'd like to thank, [indiscernible] CEO of [indiscernible] for accepting this responsibility. He knows the big international companies, [indiscernible] this had important responsibilities in Asia. Together with, [indiscernible], she will be able to maintain the experience of corporate management that is so essential in Board of Directors of a major bank. Benoit, I'll let you introduce yourself.

Thank you, Mr. Chair. Ladies and gentlemen, shareholders, Board members, Mr. Chairman. It is a great emotion and happiness that I'm here before you today for my candidacy to be a Board member of Société Générale. My name is Benoit [indiscernible]. I'm 56, married, father of 5 children and a happy grandfather of 8 grandchildren. I was the CEO of [indiscernible], world leader in construction and concessions for over 7 years. But the start of my studies, I was attracted to construction and engineering because of the [indiscernible] dimension. I spent many years on construction sites, with workers who could teach us what real life is all about. I spent over 15 years of my career aboard. My family came along with me on 4 continents. After moving 19 times, we decided to return to France in 2007, where I became General Manager, [indiscernible]. The selection committee of Eiffage, the Nominations Committee asks me to become Chairman of the group after the sudden death of my predecessor, Pierre Berger. I joined Eiffage in January 2016 in a situation that was so special as the Chief Executive Officer, pretty aware of the challenges for the teams and for our customers. And all the challenges to which we needed to rise. Wishing to put all of my passion for construction to help the teams to continue to develop as before. I'm not the specialist in banking -- in the world of banking. But I would like to provide our Board of Directors. All of my experience as a client of banks and to Société Générale in particular in its legacy activities, but also in its major development initiatives, particularly in mobility. Rest reassured that I will place my passion as an industrialist. My hands on touch to provide my services to your Board, and I thank you so much for your trust.

Thank you, Benoit. So after you vote and if you follow the Board's recommendations, the composition of the Board, excluding employee, directors will remain -- maintain the same balance between men and women. The proportion of women directors is 42% based on the calculation recommended by the Afep-MEDEF code. In terms of collective competence, its composition, corresponds to the expectations of the world, its ability to understand technological developments will be strengthened with the arrival of Beatrice Cossa-Dumurgier and Benoit [indiscernible]. Ulrika Ekman in addition to her legal experience will bring her understanding of the American market. Let me add, but having been CEO of BlaBlaCar, Beatrice also has experience in sustainable mobility. So the Board should now have 14 members to light, 11 independent directors out of the 12 directors elected by your general meeting, one director representing employee shareholders also elected by the general meeting and 2 directors elected by employees. Before concluding this presentation, I would like to highlight 4 points. Jean-Bernard Levy was reappointed as a nonvoting director, on the proposal of the Chairman for 2 years. Also, the composition of the committees add in particular the U.S. Risk Committee would evolve. As regards the Chairmanship of the Nomination Committee, I will refer to [indiscernible] who is already a member of this commitment. The extraordinary part of the general meeting includes the extension of the age limit for the Chairman from 70 to 74. This is an important decision because in 2026, your Chairman will have come to the end of his third term of office. The new Chairman will have to be appointed. It is important for Société Générale they have the widest possible choice for this essential position, which requires experience, great skills and the minimum length of service. Last, and since we'll be leaving, I'd like to thank Lorenzo Bini Smaghi and Frederic Oudea, all my colleagues on the Board and especially all of you, our shareholders for your trust. Thank you.

Thank you, Gerard. Actually, I would like to thank you for your constant commitment over the past 12 months in particular, bringing us to the end of process -- an exemplary process of selection for a listed company. I would also like to thank those who are leaving us for their contribution all throughout these years. I'd like to say a few words as well to Frederic, I would like to thank him and to express our immense [ esteem, ] nearly 30 years in the company, 15 years as General Manager in comparable resistance to multiple financial and banking. Frederic was a captain in troubled waters. He paved the way for a renewed strategy with the Crédit du Nord and Société Générale merger, he dared what many thought impossible with ALD lease plan, of which he will be a director and with Boursorama, he has built the foundations of tomorrow's financial company. For the past year, he managed the [indiscernible] transition smoothly and efficiently and elegantly. Thank you, Frederic and we wish you all the best for future career.

I will now give the floor to Jerome Contamine to tell us more about the compensation policy and principles.

Thank you, Chair. Good afternoon, ladies and gentlemen, shareholders. As you know, the Board of Directors determines the principles of the compensation policy applicable within the group, particularly with regard to so-called regulated persons according to banking regulations. It also affects the compensation of executive directors and decides on granting performance shares within the framework of authorizations given by general meeting. All of these matters are subject to the prior analysis and approval of the compensation committee, which I have the honor of chairing for some 2 years now. In 2022, the committee met 8 times. In accordance with legal provisions, the general meeting, this one must approve the 2023 compensation policy for corporate officers and both on the variable component of the compensation of corporate officers for 2022. The group's compensation policy is also, as I just pointed out, subject to numerous regulations. The Board of Directors has ensured that this policy is fully compliant with these regulations. And now let me turn to expand the compensation of corporate officers in 2023. With regard to directors in general and nonexecutive directors, the total remuneration amounts to EUR 1.7 million, the same level as what was adopted by your general meeting on the 23rd of May 2018. It is, therefore, proposed that we shall leave it unchanged. Let me also remind you that the Chairman and the Chief Executive Officer do not receive any compensation for the duty as directors. And now the Chairman of the Board of Directors receives only a big salary unchanged too since 2018, plus the cost of his official accommodation in Paris. And lastly, to guarantee total independence in the performance of his duties, the Chairman receives [ need-available ] compensation, no securities, no compensation linked to the group's performance. And now moving on to Executive Directors. As part of the renewal of the group's covenants, as I presented before, the overall compensation structure for executive directors has been simplified to improve its readability and to take into account the market practices and stakeholder -- and observations by our stakeholders. This compensation includes a peak salary and an annual variable compensation and the long-term incentive. The amount of the fixed compensation for 2023 for the new general management, to be put in place as of today. If you saw vote was determined by the Board of Directors taken into account practices of [indiscernible] companies and the comparable European banks. Also the [indiscernible] new CEO, who comes, as you know, from investment banking and the level of his current compensation. Also, the total fixed compensation of the current General Manager, Frederic Oudea has not changed since 2011. The evolution of the average basic compensation of Société Générale employees in France, which increased by 23% between 2011 and 2022, and by 8% between 2018 and 2022 to which should be added a minimum average increase 3% other than 2022, 2023 salary reviews. And lastly, the recommendations of the Afep-MEDEF code which provides that fixed compensation to only be reviewed at the relatively long intervals. In addition to fixed compensation, we have a variable compensation for all of general management based on 3 criteria. That will be common to all of general management for 65% on the basis of the budgetary budgeted achievement of the financial criteria of profitability, ROTE and the group cost income ratio subject to maintaining a satisfactory level of capital, CET1 for 20%. I trust this on the basis of the achievement of CSR objectives in that respect. Over time, we increased the weight of CSR and for 15% on the basis of criteria related to the group's strategy and businesses as well as good risk management and compliance. Variable compensation, which may account for [ 120% ] of this compensation for the Chief Executive Officer and 100% for Executive Vice Presidents. Annual payable compensation is largely index to the SG share or its equivalent, subject to performance conditions and deferred over 5 years in accordance with banking regulations. Thirdly, long-term incentive, which will only vest after 5 years, subject to the achievement of performance requirements based on 3 components: 1/3, a condition of relative performance of the SG share; [indiscernible] share compared to the years of [indiscernible] of European peers that already exists; 1/3 on a huge profitability requirement to be proposed by the Board of Directors as of 2024; and for 1/3, based on requirements related to the respect of climate trajectories. We also tried there to simplify performance criteria for long-term incentives. The amount of this compensation is capped at 100% of fixed compensation. And lastly, in accordance to banking regulations, some of annual compensation and long-term incentive payments awarded in respect of a given year may not exceed 2 years of fixed compensation. Additional clauses. Executive directors are also eligible to an indemnity to compensate for noncompetition growth. They paid at the level of their fixed compensation and whose duration is increased to 12 months. And lastly, a severance indemnity, severance payment described in the universal document which is paid only in the vendor post departure from the group. Lastly, the Chief Operating Officers and Executive Directors whose prominent contract is suspended for the duration of the term of office, retain the benefit of the supplementary pension plan for senior executives. Contributions to this plan are subject to a performance condition and set 8% of fixed compensation exceeding 4 times the social security ceiling. And let me now turn to the specific departure of our CEO, Frederic Oudea, as of today for the deferred amount. As regards to the deferred annual variable, not yet invested, the conditional presence will no longer be applicable after the expiry date of the term of office. The other conditions and in particular, the performance conditions and the timing of payment remain applicable and this remains unchanged. The allocation of the annual variable compensation for the period starting this year until today will be decided by the Board in accordance. Well, based on -- we expand the policies for 2023 and with the usual timetable for assessing the performance of corporate officers submitted to the shareholders for their approval. With regard to long-term incentives, the shares not yet vested, will be vested only on a pro rata basis for the time spent between the grant date and the end of the term of office, meaning today. All of the conditions provided for the compensation policy, in particular, performance conditions in the timetable remain applicable. As you can see, Frederic Oudea will not receive any long-term incentive awards for 2022 and 2023 in application of the Afep-MEDEF regulations. Frederic Oudea does not benefit from an indemnity for the termination of his mandate and remains bound by a noncompetition clause for a period of 6 months from the date of termination of his duties, meaning as of today. So here before we see 6 months of fixed compensation, he will not benefit from any additional Société Générale pension since his employment contract has come to an end. And now turning to the exposed compensation for 2022. Please [indiscernible] quickly. You can see a fixed compensation proposed for the General Manager and for the deputy general managers and annual variable compensation amounting to [indiscernible] for Frederic Oudea [indiscernible] for [indiscernible], provided they attain different [indiscernible] that are being said. Only Philippe because he will stay on as a director general will benefit from long-term incentives in order to comply with the regulatory requirement to cut the available components in relation to the fixed compensations. The amount of the long-term incentive for -- was conditional. Based on the payable compensation with respect to the fixed compensation as I pointed out earlier, meaning 2 times the fixed compensation level. And now briefly, on the next slide, moving on, the changes in compensation for company officers and especially long-term incentives and the variable trends in average of the media for salaries at Société Générale. Both have led to a significant decline in the ratio between the compensation for the executive directors and the median compensation within the group, 47 for the median and 33 for the average. Let me also point out, that the committee also ensured modalities for regulated populations within the framework of the CRD 5 directive for 2022, 614 persons who identified a predominant to this group, largely what we call the risktakers, largely people working in investment banking. The average amount of variable compensation increased given the good performance, not surprisingly, is up by 11% compared to 2021 for these risktakers. Average total compensation of 2022 rose by 9%. So I try to be rather quick in this technical presentation. Let me also draw your attention to the fact that these amounts, as you can see, are different from those submitted to you for a consultative vote in Resolution 13, which concerns the amounts paid and not amounts attributed and which reflect the performance of the year given the significant proportion deferred payable compensation from previous years. Thank you for your attention.

Thank you. Thank you, [indiscernible]. We're now going to proceed with the debate. This year, the shareholders were given the opportunity to ask one or several questions in writing. Individual shareholders, namely Mr. [indiscernible], Philippe de Jong, Emmanuel Besson, Dominique [indiscernible], [indiscernible], [indiscernible] and Mrs. Yutong Lee, NGOs namely Shareaction, [indiscernible] institutional such as the forum for responsible investment. One shareholder, Mr. Thierry Bros series of questions about his own personal situation that was relevant to the assembly. He will receive a personalized response. All of the answers to these questions were published last Wednesday, yesterday and today on the General Assembly's website, which, therefore, allows me to open the debate with the room with the floor. And I suggest we start with a question from the consultative committee. Microphones are made available. Our staff will circulate them as required. Please return the microphone to the young person as soon as you finish and try to keep your questions brief to allow as many of you to ask their questions. Let me start with Mr. Grybowski. #5, microphone #5, front row, please.

Thank you, Mr. Chair. I had a question about the measure of customer satisfaction in terms of their relationships with Société Générale. Could you say a few words about the indicators, you're using to measure that satisfaction or any indicators you would like to implement in the future? And if you could tell us more specifically about your targets or your sales team's targets, are they set targets in numbers in terms of customer satisfaction?

Perhaps I'll let Philippe Aymerich answer this question from retail banking, but I would just like to state to specify that all management positions, the 60 top managers in the bank are directly incentivized, and it takes account, whatever the geography, whatever the type of customer, 10%, the incentive is 10% in the variable portion of compensation. It's one of the indicators for general managers. It's always been at the heart of our strategy. Philippe, perhaps you could tell us more about the specifics of retail banking.

Greetings to all. Thank you for your question. Indeed, it's crucial. It is an absolute duty. If our customers are not happy, we cannot grow the business, and we cannot obtain financial performance. So to answer more specifically about our new bank, SG in France, other systems are comparable across all of our banks, including abroad. I'd say that there are 2 broad families of indicators. One, which is conventional in which there's a very large broad sweeping comparative study conducted with 15,000 customers. There's also analysis of complaints and there are also mystery shoppers. It's a well-proven system that continues to yield good results, and we have complemented this in a very significant manner in the past few years with 3 new indicators, which are so-called active listening indicators. The first one is every week, we send out a questioner, a cold-headed -- what we call a cold-headed questioner, 150 customers are consulted to -- so to voice their opinion. So it's not as a result of a particular event or a particular action or whether they'd recommend us or not. Second part, there's the sort of hot customer listing after a number of events, after an appointment with their banker or after a loan, for instance. We're going to get in touch with the customer to know how they felt, whether they were happy or they felt frustrated. And the third element is the analysis of social media because it's, of course, very much part of our lives, and it's very important for us to take a closer look at what circulates on social media, be it directly or indirectly. So with all of these indicators, I would say that we're achieving 2 things. First of all, we're reaching out to customers who declared themselves dissatisfied to try to resolve the issue. That is, of course, priority #1. Number two, we try to draw key learnings from all of this to improve our business processes, our practices, our operations. And finally, third target is indeed, as you were saying yourself, to -- or as Frederic was saying, to set targets, both, in terms of bankers in the branches, all the way up to top managers, because part of the compensation is based on that. So that is what the system is in a nutshell. It's a fast-moving system, very recently -- the most recent development is this focus on active listening. Thank you. I ask the stewards and stewardesses to and perhaps move towards #7.

I will deliver my question in English and my colleague will translate it into French.

Can you do it directly in French or...

No, but I can -- I will be really short. Okay. Ladies and gentlemen, my name is [indiscernible] and I'm here speaking as a representative of Czech-based coalition's top [ dirty company . ] With this coalition, we are demanding for banks and insurers to stop cooperating with fossil fuel corporations. Today, I want to highlight the fundamental issue, which is the ongoing and long-term collaboration between the Société Générale and the energy company, EPH, which is owned by our Czech [indiscernible]. Let me put it clearly that EPH is a very dirty company with emissions from coal alone surpassed the emissions of the entire Finland and their subsidiaries like [indiscernible] in Germany mines. Those [indiscernible] annually. A few days ago, EPH also delivered a plan for purchase of STACK, another coal company owning 6 more power plants in Germany and some in Turkey, Colombia and Philippines. So definitely, [indiscernible] is not the company that is on the track of decarbonization. For us, coal is not the only reason why we think Société Générale should not cooperate with EPH. One of the EPH companies, [ Slovak Ustream, ] was before the world's largest independent importer of Russian gas into Europe and EPH, as such, has the largest plan for the development of gas infrastructure among all European energy companies. And as you know, we cannot refer that to ensure inhabitable planet. We can talk about much more things that are connected with the EPH and [indiscernible] but we wrote ever been in our report, and it would be really nice if you can receive the report from us as a gift. I have 2 examples of it. I want to make just one simple demand. In the interest of Climate Justice. I urge you to end the collaboration with EPH. And my question is simple. When you will do it and what you need from the public to do this step and to stop the dirty -- the cooperation with the dirty company, EPH and the [indiscernible].

Perhaps we don't need to translate. I suppose Mrs. [indiscernible] will answer and people can infer the question from the answer.

To make things perfectly clear, we're talking about a very specific situation, a Czech customer. Well, on principle, we don't comment individual customer cases, but -- your point, of course, is a question about our policy in terms of coal. Société Générale was one of the very first banks to commit very strongly to exit -- to gradually exit coal to reduce our exposure to 0 by 2030 in OECD countries and EU countries and by 2040 in the rest of the world. We, since 2016, have stopped financing projects that are purely dedicated to coal, and we have started working or started a conversation, as I was saying earlier, a conversation with our customers to analyze their alignment and disengagement strategy. And based on that sectoral policy, we take individual decisions either to exit or to continue working with them. And we always do this very transparently in terms of our policies and what we do. Thank you. To your left.

My name is [ Caroline Mets. ] I'm talking on behalf of ShareAction, which you mentioned earlier, which is a British NGO that of course, is active in responsible investments. We would, first of all, like to thank Société Générale for its commitment by our side over the past few years, and we'd like to note that the bank, as you have said, has been one of the leaders in -- with [indiscernible] from coal, although there is still much work that remains to be done, it seems. I would now like to discuss oil and gas. As you know, the International Energy Agency concluded 2 years ago, that its carbon neutrality scenario by 2050 means that no new oil or gas sites should be approved for new developments. Société Générale said it was in favor of that. And it based its policy on that scenario as we heard earlier. The bank should, therefore, logically apply all of the conclusions of the International Energy Agency to its financing policies. In February 2023, a group of 22 investors accounting more than EUR 1.4 billion in assets, including [indiscernible] and [indiscernible], Asset Management called for Société Générale move even further. These investments asked Société Générale to stop financing new oil and gas extraction projects and to take measures against customers who are investing in new installations. Two weeks ago, BNP Paribas, which also received a letter from investors answered and said it excluded direct funding of new oil and gas fields and committed to gradually disengage from nondiversified exploration and production companies. My question is as follows: Can Société Générale commit to publish by the end of 2023, a strategy aiming to restrict direct financing of new oil and gas projects and financing of companies who develop them?

I would like to thank you for asking this question with at least an acknowledgment of what we have done, which is why we can have a meaningful conversation. I would also like to remind you and I believe that Société Générale is probably one of the very first banks to have committed in the short term, 2025, not 2050 or 2030, to reduce in absolute terms, its financing to the fossil fuel sector, oil and gas. And let me also remind you the commitments we made in terms of coal, W.e have given up on a number of relationships because of this. I believe that this question will be a question for Slawomir when the time comes. But what I can tell you is that very naturally, it would be very strange, if I had been to take new commitments as I was about to leave Société Générale. And I'm sure that Slawomir will address these issues when the time comes. I would just like to tell you how deeply committed we are, as [indiscernible] said, and also how keen we are to provide support to our clients. And there might be a bit of a gap there, but we do try to encourage our customers to transform their business model in a positive manner and more pragmatically. And I would just like to insist on the fact that access to energy is a huge challenge in the short term for a lot of our customers for a large part of the French population and threats all the balance of society and all confrontations between different generations must not be allowed to prevail. And I think we really need to educate about the proper transition scenario. And if you'll allow me, I would rather let Slawomir answer this when the time comes. And thank you for engaging with us in a rational manner. You will certainly obtain a response by the end of the year.

Then to the left here.

Ladies and gentlemen, I would like to thank Mrs. Lebot. She has done very much for Société Générale in terms of the bank's inclusion policy including for the LGBT community. I am a shareholder, but I have been an employee of Société Générale myself for more than 30 years. And that's something that we're very happy with. So I'm -- that is not the purpose of my question. It was about the compensation policy. I am delighted to see that Société Générale is making a lot of money. I'm very happy for the bank. I'm very happy for the directors. I'm very happy for the top management in terms of all of these compensation policies. I hope I won't get any cat calls here. But as an employee, I certainly hope that I'm allowed to say something to speak out. I have been working for Société Générale for more than 30 years. And I have lost my motivation. I deeply shocked by the indecent difference that exists between the compensation policy for top managers and the total lack of consideration for myself. Personally, I'm not talking for every Société Générale employee because I am not here to speak on behalf of them. I'm not a union member, just as an individual. This is my opinion. I talked to my colleagues and a lot of them complained too. Some of them resigned, a lot of young people resigned because they see that they don't have any future in terms of pay. Of course, money is not the most important thing in life, but it certainly does help. You were talking earlier about team spirit. What does that mean? When I looked it up, and there's a sentence in there that says we wish to become the reference relation bank and work with our customers as we wish to work amongst ourselves. Listening co-construction, valuation of contributions and the final one, it's a bit of a joke, solidarity in success and in difficulties. For the time being, I personally have only seen solidarity when there were difficulties. When the going is easy, I see nothing coming. I had to wait for 5 years to get a EUR 2,000 year gross salary raise annually. So my question is, don't you think that as part of your corporate values, you should also include simple notions of decency and fairness.

So again, allow me to answer this one. There might be an individual issue you're facing, but I have spent a lot of time in social dialogue with the unions. Every quarter, I'll meet with them. Every quarter, we would discuss both the strategy and the compensation. I would like to thank the unions because we have worked very hard to transform the bank, and I believe we've worked very well on issues of compensation. I would like to show you, though, I mean, if you'll allow me, why don't we talk about me. We talked about the equity ratios. Could we put that slide back up on the screen, the one that's specifically about me, the ratios are down. 64 in '21, 47 in '22 and 45, if you look at the average compensation. That's the average compensation of employees, EUR 76,000 up to EUR 88,000 in 2 years. That is the overall statistic. We signed an agreement with employee representatives about pay to factor in inflation. There have been significant pay rises. We have also had additional profit sharing to avoid an impact on potential dividend distribution. And I would say that we have been extremely responsible in terms of compensation. Of course, this is an average. There may be individual cases that do not reflect that. But if I look at these figures, I would say that we have no reason to be ashamed in the manner in which we have shared with employees -- shared the group's success with employees. And over the past 2 years, we have now relaunched a Employee Shareholder Plan. I have just signed the plan for 2023, very attractive conditions. Meaning that, currently, Société Générale employees themselves hold a significant portion of the bank's shares.

Thank you, Frederic. Is there -- someone towards the left, #2.

Mr. [indiscernible], an individual shareholder. I saw that the number of employees, the headcount was down 10%, but the payroll was up 25%. It sounds a little bit strange. If I look at the chart on Page 13 of the summons to the invitation to attend for 2020, dividend distribution 0. And on the line just below that, it says 2019, paid out in 2020, EUR 2.2. I'd like to understand. Another question. You seem very happy with the Internet and banks. You can't place orders on the Internet when the shares are subjected to bonus -- to bonuses. You have to go to the banking branch and pay huge fees. So we're going to complain about that, and it's very difficult to obtain compensation. And Mr. Oudéa, 7, 8 years ago, I'd already talked about that in a meeting in an agency that was near the Paris Stock Exchange. And 8 years later, I'm still waiting for an answer.

So I'm not quite sure that I can answer this accurately enough for you. But in fact, the reduction of the headcount is probably the disposal of Rosbank, which employed 12,000 people. And then, of course, I'm slightly surprised with your 25%. But I suppose it's a manner to answer the previous question. Yes, we have given pay rises, both on the fixed and the variable portion of pay. But we have taken into account the need to motivate and to share profits with our employees. As for the dividend, let me remind you that we were unable to pay out a dividend for 2020 because of COVID. You may remember that it was simply prohibited by the supervisor. Then we resumed our dividend distribution policy, both in cash, as will be the case this year, EUR 1.7 and last year EUR 1.65, offering an attractive yield for shareholders. And in addition to that, a share buyback plan of EUR 440 million this year, which allows us to buy back shares, which we then cancel and allow us to pay out more dividends because the same future profit is, of course, divided by a smaller number of shareholders. So I'm terribly sorry that I do not seem to have answered your request several years ago. I don't know if any one of the team is going to answer you about the Internet.

Yes, briefly. I don't have the answer myself, and we'll try and do this quicker than 7 or 8 years. There are a few specific cases -- very specific case. There are some things that we cannot actually manage through the app or over the Internet in a perfectly seamless manner. So that must fall under this category. But let me reassure you, our SG app, I can talk about the Boursorama app. We have apps and software that are very popular with our customers. And to [indiscernible] the comparative analysis conducted. In the rankings, we ranked very high. So maybe we haven't processed what you've just talked about, but the Internet is a fantastic tool for SG's shareholders in general.

And there's a booth outside where individual issues can be addressed with bank employees. That might work for you. Behind #4, perhaps.

Mr. Chair, greetings. [indiscernible] I'm an individual shareholder. I would like to tell the gentleman, who is about to become our CEO, I'm still finding it difficult to pronounce his name, welcome in your new job. And to the gentleman who's about to leave as the CEO, thank you, and good luck at Sanofi. A lot of people in this room also hold Sanofi shares and ALD. And I am delighted that recruitment was conducted internally, and I'm delighted to see that. It was the case. Three questions. One, have you looked at the Credit Suisse case. As you know, it was acquired by UBS. Second question, did you suffer any damage as a result of the demonstrations against the pension reform earlier this year, where there many bank branches that were attacked or ransacked. And third question. A lot of people come here to complain. Well, I'm just going to congratulate you. I've had the opportunity to say what my opinion -- what I thought about [indiscernible] last week. And I can tell you what I can tell you my opinion about sharing box for those who have purely nominative shares. You developed something that's perhaps not totally user-friendly, but once you've understood it, it works really well. So well done for that. I would have a suggestion to improve. Once you've managed to include all of these shares on the same e-mail address, could you perhaps create a single unified tax form for a single account?

Well, thank you very much for paying tribute to our employees' hard work and the quality of our app. We haven't -- we didn't really have the opportunity to look into that case because, as you know, a Swiss solution was found in a very short period of time locally. There were a few branches that did suffer as did some of our competitors, but less during the so-called west crisis. I think we're probably not at the heart of the protest. So yes, a few branches were damaged, but relatively limited damage and not the violence. If you remember the Crédit du Nord branch that actually burnt down and endangered the lives of its employees during the [indiscernible].

For the platform, well, many thanks for your feedback. We're going to look into it. It's part of the active listening that we conduct. And in terms of the branches, Frédéric has already answered that, although we tend to be -- we have -- in Paris, we have a great many branches and a lot of the demos take place in Paris.

Mr. Chair, greetings. [indiscernible] I would, of course -- I would like to turn to the excellent job performed by your team in extending a warm welcome to individual shareholders. I attend a large number of such meetings and your efforts to extend a welcome is absolutely fantastic.

You can thank the Secretary of the Board.

Which brings me to my 3 questions. Very clearly, a company cannot just boil down to a set of figures. And this paradigm with the emergence of artificial intelligence and new technologies, chatbots and so on and so forth, can you tell us how you can both attract and retain talent and how you hedge will cover cyber risk, which I believe is a never-ending race against the diversity? Second question. You have just said, Mr. Oudéa, that you signed an Annual Employee Shareholder Plan. We are delighted. It's a very interesting and a very positive initiative. But you are planning to extend the 30% discount. It's what the press -- what the paper seem to be saying. So I might be mistaken. But in the meantime, a 30% discount does not seem to be the best idea or the best way to impress the market. And if that were to be the case, why do you not suggest a 10% discount for the payment of dividends either in cash or in shares? My final question. To the extent that you have extremely restrictive ESG criteria, could you tell us which of your directors is in-charge of climate risk?

So Mr. [indiscernible]. Thank you for your questions. Maybe Lorenzo can briefly remind you that.

As for the climate and ESG aspects, as I was saying, the entire Board of Directors is responsible for this, and we also have a censeur non-voting director that helps the Board discuss these issues. We don't have any director who specifically dedicated to these responsibilities. We all have a common responsibility.