TEXT-S&P summary: Societe Generale
(The following statement was released by the rating agency)
Nov 19 -
Summary analysis -- Societe Generale ------------------------------ 19-Nov-2012
CREDIT RATING: A/Negative/A-1 Country: France
Primary SIC: Commercial banks,
Mult. CUSIP6: 83364L
Mult. CUSIP6: 83364W
Mult. CUSIP6: 83367E
Mult. CUSIP6: 83367T
Mult. CUSIP6: 83368R
Mult. CUSIP6: 83368T
Mult. CUSIP6: 83369R
Credit Rating History:
Local currency Foreign currency
23-Jan-2012 A/A-1 A/A-1
07-May-2009 A+/A-1 A+/A-1
15-Feb-2008 AA-/A-1+ AA-/A-1+
Ratings Score Snapshot
Issuer Credit Rating A/Negative/A-1
Business Position Strong (+1)
Capital and Earnings Moderate (-1)
Risk Position Adequate (0)
Funding and Liquidity Average
and Adequate (0)
GRE Support 0
Group Support 0
Sovereign Support +1
Additional Factors 0
Major Rating Factors
-- Diverse portfolio of activities.
-- Main businesses' solid foundation in core markets.
-- Consistent and increasingly focused strategy.
-- Moderate capitalization compared with that of international peers.
-- Large domestic and international balance sheet that entails significant credit risk.
-- Large and complex trading book.
The negative outlook on French bank Societe Generale reflects our view that there is a one-in-three possibility that negative trends for France's banking sector industry risks, protracted recession in the eurozone, and any potential lowering of the ratings on France, could more than offset the benefits of the bank's stronger capitalization on its stand-alone credit profile (SACP). A combination of these factors would lead us to downgrade Societe Generale.
Negative trends in our assessment of industry risks in France's banking sector and increasing economic risks in the regions where Societe Generale operates could lead us to revise the anchor to 'bbb+' from 'a-'. We also note that, under our criteria, if all other factors remain the same, we would not downgrade Societe Generale if we were to lower the ratings on France. We would, however, reassess our opinion of the French banking system to include the underlying reasons for the downgrade and their potential impact on the bank's SACP.
We might revise the outlook to stable if, all other factors being equal, the improving trend in Societe Generale's capitalization continued, causing us to revise our projected risk-adjusted capital (RAC) ratio to above 7%. This positive trend might counterbalance concerns over France's banking sector industry risks, and a potential lowering of the ratings on France. This could happen if we came to believe there would be no serious deterioration in the French and eurozone economic and operating environments in the foreseeable future.
Related Criteria And Research
-- Various Rating Actions Taken On French Banks Due To Rising Economic Risks, Oct. 25, 2012
-- Societe Generale And Core Subsidiaries Long-Term Ratings Lowered To 'A' Following Sovereign Action; Outlook Stable, Jan. 23, 2012
-- Banks: Rating Methodology And Assumptions, Nov. 9, 2011
-- Banking Industry Country Risk Assessment Methodology And Assumptions, Nov. 9, 2011
-- Group Rating Methodology And Assumptions, Nov. 9, 2011
-- Bank Hybrid Capital Methodology And Assumptions, Nov. 1, 2011
-- Bank Capital Methodology And Assumptions, Dec. 6, 2010
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