Société Générale / Risk Report - Pillar III

11 LIQUIDITY RISK

REFINANCING STRATEGY

REFINANCING STRATEGY 11.3

The Group’s financing strategy is based on the following principles: The Group’s stable funding resources (including shareholders’ p equity, the stable part of customer deposits and medium/long-term market resources) finance the long-term needs of the businesses (including tangible and intangible assets, customer loans and the securities portfolio excluding trading activities). Besides, stable resources are used to maintain a portfolio of high-quality liquid assets to cover outflows in situations of stress; Short-term market resources finance the Group’s short-term assets, p which are predominantly carried by Global Banking and Investor Solutions’ market activities. MARKET FINANCING The Group’s market resources (including short-term and long-term resources) totalled EUR 244 billion as at 31 December 2019. Of this total, EUR 106 billion have a remaining maturity of less than one year, of which EUR 48 billion correspond to debt securities issued with an initial medium/long-term maturity (more than one year) and EUR 58 billion to short-termmarket resources. Group short-term market resources consist on the one hand of unsecured notes issued under the Group’s short-term programmes, mainly by the Group central treasury, through Certificates of Deposits, promissory notes and commercial papers, and on the other hand of deposits. These resources are raised from banks and financial customers. while adhering to diversification thresholds on funding sources by counterparty and by currency. Asset-Backed Commercial Paper vehicles have contributed to the Group short-term market resources since 1 January 2014, following their inclusion in the consolidation scope as per the application of IFRS 10. The amount of Group short-term market resources totalled EUR 58 billion as at 31 December 2019, as compared to EUR 58 billion as at 31

December 2018, thus stable over the year, according to the Group’s strategy to limit the share of these resources in the funding structure of the balance sheet. Medium/long-term market resources (including the portion of securities originally issued with a maturity of more than one year and maturing within the year) totalled EUR 186 billion as at 31 December 2019, against EUR 170 billion as at 31 December 2018. These consist of long-term interbank liabilities (long-term credit lines granted by central banks, commercial banks and international financial institutions, etc.) and medium/long term debt securities, the breakdown of which reflects the Group’s policy on the diversification of funding sources. The Group has access to large and complementary investor pools via: senior vanilla issuances in the form of public issuances or private p placements; Senior Non-Preferred (SNP) debt; p covered bonds issued by SG SFH and SG SCF vehicles as well as by p the Caisse du Refinancement et de l’Habitat ; senior structured issuances distributed to institutional investors p and, to a large extent, to individual customers (via retail and private banking networks belonging to the Group or to its partners); Additional Tier 1 and Tier 2 subordinated debt issued by Société p Générale SA, booked as equity. Furthermore, access to diversified investor pools is ensured by a wide array of Group issuers: Societe Generale SA, SGIS, Crédit du Nord and the main International Retail Banking and Financial Services subsidiaries issuing mainly secured (securitisations, covered bonds) and unsecured notes. International Retail Banking and Financial Services issuances, along with its deposit inflows and bilateral borrowings, are specifically aimed at increasing the funding autonomy of the belonging subsidiaries.

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PILLAR 3 - 2020 | SOCIETE GENERALE GROUP |