Société Générale / Risk report 2021 - Pillar 3 2020

1 GROUP CONCISE RISK STATEMENT CREDIT RISK AND COUNTERPARTY CREDIT RISK PILLAR 3 - 2021 | SOCIETE GENERALE GROUP | 6 GROUP RISK EXPOSURE BY EXPOSURE CLASS (EAD) AT 31 DECEMBER 2020 ON- AND OFF-BALANCE SHEET EXPOSURES (EUR 1,004BN IN EAD) * Institutions: Basel classification bank and public sector portfolios. GEOGRAPHIC BREAKDOWN OF GROUP RISK EXPOSURE AT 31 DECEMBER 2020 (ALL CLIENT TYPES INCLUDED): EUR 1,004BN Regarding the Group’s net risk charge, in 2020 it amounted to EUR -3.3 billion, up +159% compared with 2019. This change is driven by the increase in outstanding amounts in Stage 2 due to the deterioration in the economic outlook and, to a lesser extent, by the increase in Stage 3 outstanding amounts due to defaults that occurred mainly in the first half of the year. Expressed in basis points, the cost of risk thus stands at 64 basis points for the year 2020 against 25 basis points in 2019. The gross doubtful outstanding amounts coverage rate decreased significantly to 52% as at 31 December 2020 (compared with 56% as at 31 December 2019), mainly due to the sale of portfolios of non-performing loans that were heavily provisioned, and the entry into default of a few cases of Corporates of high unit value, weakly covered. (See details in section 6 of Chapter 6 “Credit risk”.) TABLE 1: PROVISIONING OF DOUBTFUL LOANS (In EURbn) 31.12.2020 31.12.2019 Group gross doubtful loans ratio (1) 3.3% 3.1% Doubtful loans (Stage 3) 17.0 16.1 Stage 3 Provisions 8.8 9.0 Group gross doubtful loans coverage ratio 52% 56% Customer loans and advances, deposits at banks and loans due from banks, finance leases, excluding loans and advances classified as held for sale, cash balances (1) at central banks and other demand deposits, in accordance with the EBA/ITS/2019/02 Implementing Technical Standards amending Commission Implementing Regulation (EU) No 680/2014 with regard to the reporting of financial information (FINREP). TABLE 2: COST OF RISK (In bps) 31.12.2020 31.12.2019 Cost of risk 64 25