Ohridska banka, Societe Generale Group

INTERNATIONAL AND REGIONAL ECONOMIC CHALLANGES

Jitka PANTŮČKOVÁ

President of the Board of Directors

30/04/2010

2MSE, Ohridska banka SGG, Jitka Pantuckova, President of Board of Directors – April 2010

Content

Outlook for 2010 + EURO Area Société Générale’s challanges Conclusion

3MSE, Ohridska banka SGG, Jitka Pantuckova, President of Board of Directors – April 2010

Outlook for 2010 +

4MSE, Ohridska banka SGG, Jitka Pantuckova, President of Board of Directors – April 2010

Outlook for 2010

Thanks to rapid economic growth in emerging countries, particularly in Asia, the recovery in international trade will continue in 2010. Growth will return in developed countries, but will remain modest at just over: 2.5% in the USA close to 1% in the Euro Zone

Monetary policies will remain highly accommodative, with key central bank rates unchanged at:

0.25% in the USA 1% in the Euro Zone and 0.5% in the UK

Concerns are now directed towards the severe deterioration in public finances and the sustainability of government debt. The most vulnerable borrowers – Greece first and foremost, but also Spain, Ireland, Portugal and several Eastern European countries – will have to make drastic budget adjustments spread over several years, and starting in 2010.

5MSE, Ohridska banka SGG, Jitka Pantuckova, President of Board of Directors – April 2010

Monetary challenges

Monetary policy dilemma Advanced economies – easing monetary policy to be used aggressively to

counter deflation risk Emerging economies – easing monetary policy to respond to the deteriorating

outlook The current growth gap between the USA and the Euro Zone, although

temporary, has consequences for monetary policy expectations and the euro-dollar exchange rate.

6MSE, Ohridska banka SGG, Jitka Pantuckova, President of Board of Directors – April 2010

New trends – looking forward

Markets – renewed momentum Economy – nascent recovery Banking sector – G20 reforms Risk management – new culture

7MSE, Ohridska banka SGG, Jitka Pantuckova, President of Board of Directors – April 2010

Severe Risk Management Culture

Long-term approach of customer relations and risk management Business focus on long term customer relationships Banking risk approach focusing on economic fundamentals

Committed management Committees chaired by General Management to set risk policies and limits Front-line management’s involvement at all levels in risk management Transparency about the nature and location of risks

Powerful and independent oversight functions Risk Management, Compliance and Internal audit – key roles

Close attention paid to the risk/reward balance

8MSE, Ohridska banka SGG, Jitka Pantuckova, President of Board of Directors – April 2010

EURO Area

9MSE, Ohridska banka SGG, Jitka Pantuckova, President of Board of Directors – April 2010

EURO Area – small recovery, big challenges

Early 2010: a real-world test of resiliency for the EMU. Since the start of the year the financial markets have cast a very wary eye

at several euro zone countries, and at the single currency The EU Council and the Eurogroup

announced publicly that they would,

if necessary, take “determined and coordinated”

action to safeguard financial stability in the

Euro Zone. To be expected a soft, anaemic recovery

with divergences between countries. Monetary policy: adjustments and continued

flexibility

10MSE, Ohridska banka SGG, Jitka Pantuckova, President of Board of Directors – April 2010

EURO Area – banking summary

European banks weighed in the balance Wide disparity between the various banking institutions:

1. Some banks emerge from the crisis stronger than ever (Societe Generale, BNP Paribas, Santander, Deutsche Bank & Credit Suisse)

2. Others still struggling to get back on their feet (UBS, RBS, Commerzbank & Lloyds)

Banking institutions are debatably far from as solid as they might wish to appear (provisions set aside by European banks cover only 40% of the doubtful debts)

Remuneration – Bonuses: bank’s dilemma On one hand trying to lessen public opinion, which is indignant while trying to pay the staff

enough on the other hand

Basel III – bank solvency and liquidity under review Better systemic liquidity management Basel Committee to deal with solvency and liquidity issues:

Tier I modification Introduction of leverage ratio Two new liquidity ratios – measuring banks’ capacity to withstand liquidity crisis lasting a month & for

a year.

11MSE, Ohridska banka SGG, Jitka Pantuckova, President of Board of Directors – April 2010

EURO Area – new opportunities

Europe 2020 Strategy

Fundamental long-term strategic economic framework of the EU and new approach:

Crisis is seen as opportunity for new development of the EU based on: – Knowledge

– Innovation

– Environmental protection

– Ecology and

– Efficient use of natural resources

Priorities:– Economic growth based on knowledge and innovation factors

– CSR

– More competitive, interconnected and greener economy

12MSE, Ohridska banka SGG, Jitka Pantuckova, President of Board of Directors – April 2010

Société Générale’s challanges

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Société Générale’s after the banking crisis

Société Générale has been acknowledged for its resilience

A universal banking - a good business model

The Group’s strengths to keep the business portfolio viable:

Solid franchises Commitment and professionalism of the Group’s staff High solvency ratios

Despite its strengths, the Group must not rest on its laurels – it must emerge from the crisis stronger and better

14MSE, Ohridska banka SGG, Jitka Pantuckova, President of Board of Directors – April 2010

Société Générale in the region

Markets with potential despite the crisis: Despite the crisis that particularly affected small countries, there is still a real

development potential Regulatory constraints strengthened by the crisis, with signs of flexibility in 2010

A controlled growth: A strengthened position on markets

A potential for strengthening the position regarding organic growth variable according to markets

15MSE, Ohridska banka SGG, Jitka Pantuckova, President of Board of Directors – April 2010

“Ambition SG 2015” project

The initiative aimed at defining the Group that we want to build over the next five years

The ultimate goal of this process is: to become “THE” reference bank in Europe to be the one that commands the respect of all, to remain a bank for which we are all proud to work and which a lot of people

would like to join

The initiative is structured around four key themes: our customers the men and women who make up our Group our operating model our communication and image

16MSE, Ohridska banka SGG, Jitka Pantuckova, President of Board of Directors – April 2010

Conclusion

Prevention against the crisis – changes in the framework: Macroeconomic Regulatory Supervisory

Stabilising the financial system and the real economy by: Supplementing the institutions and legislation with new initiatives Creating rules for stabilising the financial markets

International policy coordination based on: Better early – warning systems and More open communication of risks