The Group’s profitability targets and figures mean the maximum risks to which Societe Generale is exposed are limited

At December 31, 2011, Societe Generale’s total EAD1 stood at € 743 billion (including € 559 billion in outstanding balance sheet loans).
At December 31, 2011, 85% of the Group’s outstanding loans1 were concentrated in the major industrialised countries. Almost half of the overall amount of loans was to French customers (26% to non-retail customers and 18% to individual customers).
The Group’s exposure2 to emerging markets outside of the EU is split between approximately one hundred countries in 4 regions (Central and Eastern Europe outside the EU / Africa / the Near and Middle East / South America / Asia). At constant scope and constant exchange rates, its net exposure to emerging countries was stable between December 31, 2010 and December 31, 2011.
At 673 basis points for 2011, Societe Generale’s cost of risk is a marked improvement on 2010. The Group’s net risk expense for 2011 amounted to € 3,015 million for the year, compared with a figure of € 3,464 million on December 31, 2010. Non-performing loans: at December 31, 2011, Societe Generale's doubtful loans coverage ratio (loans written down net of collateral4) amounted to € 19.4 billion compared with € 19.0 billion on December 31, 2010, resulting in a higher provisionable commitment coverage rate of 76% compared with a figure of 72% on December 31, 2010.
The average trading VaR5 amounted to € 37 million for 2011 against an annual average of € 35 million for 2010.
According to the last census (2011), the headcount for Societe Generale Group’s risk function was stable at just over 5,000 employees (including 940 within the actual Group Risk Division at the end of December 2011).
NOTES
  1. Exposure at Default (EAD) adds the portion of loans drawn and converts off-balance sheet commitments using the average credit conversion factor to calculate the exposure recorded in the balance sheet at the time of the counterparty’s default.
  2. On- and off-balance sheet exposures include receivables net of guarantees and provisions, derivatives and securities.
  3. Annualised, excluding disputes, legacy assets in respect of assets at the beginning of the period, and Greek sovereign debt write-down.
  4. Including disputes, legacy assets and Greek sovereign debt write-down.
  5. Excluding legacy assets
  6. VaR: Value at Risk with a 99% confidence level. In accordance with the regulatory internal model, this composite indicator is used for the day-to-day monitoring of the market risks incurred by the bank, notably within the scope of its trading activities.