Société Générale / Risk Report - Pillar III

9 OPERATIONAL RISK

OPERATIONAL RISK MEASUREMENT

Quantitative data The following charts break down operating losses by risk category for the 2015-2019 period.

OPERATIONAL RISK LOSSES: BREAKDOWN BY SOCIETE GENERALE RISK EVENT TYPE – AMOUNTS

OPERATIONAL RISK LOSSES: BREAKDOWN BY SOCIETE GENERALE RISK EVENT TYPE – NUMBER OF EVENTS

Loss of operating environment/capability 1%

Errors in pricing or risk evaluation including model risk 12%

Disputes with authorities 18%

Systems interruptions 4%

Errors in pricing or risk evaluation including model risk 2%

Disputes with authorities 6%

Systems interruptions 3%

Rogue trading 0%

Fraud and other criminal activities 34%

Commercial disputes 16%

Loss of operating environment/ capability 1% Commercial disputes 14%

Fraud and other criminal activities 29%

Rogue trading 0%

Execution errors 37%

Execution errors 23%

of losses in this category fell significantly in 2019 following the settlement of the Group's main disputes in 2018; commercial disputes represented 14% of total Group operating p losses. The trend is down for this category over the period considered; pricing or risk assessment errors, including model risk, represent p 12% of the total amount of losses. The main cases concern the pricing and ALM models. The other categories of Group operational risk (activities not authorised on the markets, system interruptions, loss of operating environment/capability) were still relatively insignificant, representing barely 4% of the Group’s losses on average over the 2015 to 2019 period.

Over the past five years, Societe Generale’s operational risks were concentrated on average on four types, accounting for 96% of the Group’s total operating losses: fraud and other criminal activities represented 29% of the amount p of operating losses over the period. They are mainly composed of external frauds on financing files (falsified financial statements by the client, theft or misappropriation of collateral/guarantees, etc.), fraud on manual means of payment (cash, transfer and cheque) and supplier fraud on financed equipment; execution errors represented 23% of total operational losses, p thereby constituting the second leading cause of loss for the Group. The amount of losses on this category is stable over the period; disputes with authorities, the third largest category, represented p 18% of the Group’s operational losses over the period. The amount

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| SOCIETE GENERALE GROUP | PILLAR 3 - 2020