EU FINANCIALS: SocGen Q4 Results
Feb-07 13:58
Credit positive. Turnaround continues.
- Revenues were 11% higher YoY, with the retail bank and IB both doing very well
- OpEx was 1.5% lower on lower restructuring charges, but influenced by disposals as well.
- Cost of risk fell 4bps in Q4, although this was driven by Stage 1&2 releases, Stage 3 provisions were only marginally lower than Q3.
- CET1 was up 0.1% from Q3 to 13.3%. Capital generation added 27bps and vs -16bps distributions. Disposals, primarily Moroccan subsidiaries added 20bps with lower RWA.
- 2025/6 targets show CET1 >13% and RoTE climbing to 8 & then 9-10%. This will require continued revenue growth and cost control.
- Issuance plan involve €2bn of AT1 and €7bn of Sr Non-Pref.
- Currently SOGCENS AT1 bucket is at 2.8%, 2.5% is considered 'full' normally, and allowing from some RWA growth, probably indicates that additional issuance will be to facilitate calls of existing issues
- In terms of AT1's SOCGEN have the USD 1.25bn SocGen 8% call in Sep 2025, this is now trade at Z+180. We highlighted that this bond was always likely to be called in our 2025 AT1 calls blast in December - https://mni.marketnews.com/4gxCLaR - due to its LIBOR exposure. It is now trading at only c180bps spread.
- Next in line is the SOCGEN 4.75% in May 26 of USD1bn - this trade +303 over, its float spread is +393bps.
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PIPELINE: $4.25B IADB 5Y SOFR Debt Launched
Jan-08 13:56
- Date $MM Issuer (Priced *, Launch #)
- 01/08 $6B *World Bank 7Y +54
- 01/08 $4.25B #IADB 5Y SOFR+42
- 01/08 $1.5B #Kommunalbanken 5Y +48
- 01/08 $1.5B #CoE Dev Bank 5Y SOFR+42
- 01/08 $500M Novelis 5NC2
- 01/08 $Benchmark AIIB 5Y +47a
- 01/08 $Benchmark NWB 5Y SOFR+50a
- 01/08 $Benchmark Ontario 5Y SOFR+58
- 01/08 $Benchmark Northwestern Mutual 5Y +70a
- 01/08 $Benchmark Deutsche Bank 4NC3 fix/SOFR
- 01/08 $Benchmark Codelco 10Y +195a, 30Y +215a
- 01/08 $Benchmark HF Sinclair 6Y +165a, 10Y +185a
- 01/08 $Benchmark Santander UK 6.25NC5.25 +150a
- 01/08 $Benchmark Indonesia 5Y 5.65%a, 10Y 5.95%a
GBP: Cable FX Exchange traded Option
Jan-08 13:45
GBPUSD (7th Mar) 124.00p, bought for 2.05, 2.06, 2.07 in ~1.22k.
- This is already ITM, the CME contract also trades close to where the spot is, now at 123.21.
US TSY FUTURES: Post-Weekly Initial/Continuing Jobless Claims React
Jan-08 13:33
- Treasury futures have tempered the post-ADP bounce off lows following softer than expected weekly jobless claims, continuing claims higher w/ prior down-revised.
- The Mar'25 10Y contract trades -2.5 at 108-03 after breaching round number support to 107-28.5 low earlier, 10Y yield currently at 4.7035 +.0185 after tapping 4.7280% high, 2s10s at 42.486 +3.514.
