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Société Générale Bank & Trust
Société Générale Bank & Trust
11 avenue Emile ReuterL-2420 LuxembourgRCS Luxembourg B 6061Tel. +352 47 93 11-1Fax +352 22 88 59
annual Report
2005
on the back cover
Atlas marocain
November 2003
Caroline Dujardin
on the cover page
La mare aux fées (Detail)
January 2001
Caroline Dujardin
on the right page
Rivages (Detail)
March 2005
Caroline Dujardin
Sommaire
The Bank
4 Backedbyamajorbankinggroup8 SociétéGénéralegroup’sglobalinternationalnetwork10 SGBT,theadvantagesofabankwithmanylinesofbusiness14 SGBTBoardofDirectors,ManagementCommitteeandOperationalManagement
Management report
20 Businessreviewandoutlook22 ConsolidatednetincomeofSociétéGénéraleBank&Trust22 Consolidatedshareholders’equity
Market risks at December 31, 2005
26 Organizationofriskcontrol27 Methodsformeasuringmarketrisksandsettingexposurelimits29 Counterpartriskpolicy30 SociétéGénéraleBank&TrustLuxembourgMarkettransactionrisks
Consolidated financial statements
35 ReportoftheIndependentAuditor36 ConsolidatedbalancesheetatDecember31,200540 ConsolidatedincomestatementatDecember31,200542 NotestotheconsolidatedfinancialstatementsatDecember31,2005
Abridged version of the parent company financial statements
83 ReportoftheIndependentAuditor84 BalancesheetatDecember31,200587 IncomestatementatDecember31,2005
Summary
SOCIÉTÉ GÉNÉRALE BANK & TRUST
Nota bene: This english version is a translation of the french annual report. In the event of discrepan-cies between the english and french versions, the french text shall prevail. The french version is available upon request at the head-office of the company.
■ The Bank
Jardin
April1993
CarolineDujardin
ANNuALRepORT2005■SOCIeTeGeNeRALeBANk&TRuST�
Société Générale Bank & Trust (SGBT) is a wholly-
owned subsidiary of Société Générale, a leading Euro-
pean financial services group, operating in 76 countries
with more than 103,000 employees.
HISTory
A French banking group founded in 1864, now with
operations throughout the world
SociétéGénéralewasfoundedin1864bypublicsubscrip
tion,withtheaimoffinancingindustrialinvestmentsandinfra
structureprojects.
DuringthethirdRepublic,thecompanyprogressivelybuilt
upanationwidenetwork,andby1940hadopenedatotalof
1,500branchescomparedwithjust32in1870.
FollowingtheFrancoprussianWar,theAlsaceMosellebran
chesweretransferredtoaGermansubsidiary,SociétéGé
néraleAlsaciennedeBanque(Sogénal).
AfteropeningaforeignofficeinLondonin1871,Société
Généralerapidlydevelopedan internationalnetworkby
extendingSogénal’sactivitiesintoCentraleurope(Ger
many,Austria,Switzerland,Luxembourg),andbyestablishing
branchesinNorthAfricaintheperiodfrom1909to1911and
laterintheunitedStates(1940).
SociétéGénéralewasnationalizedin1945,andplayedanac
tiveroleinfinancingpostwarconstruction.Ithelpedtospread
newfinancingtechniquessuchasmediumtermdiscountable
credit,offbalancesheettransactionsandleasefinance.
FollowingtheliberalizationoftheFrenchbankingsystemin
1966,SociétéGénéralediversifieditsactivitiesandexpanded
itsretailcustomerbase.
TheBankwasreturnedtotheprivatesectorinJuly1987.
Since1997,ithasexpandedconsiderablyviaacquisitionsin
itsdifferentbusinesses.
In1997,withthepurchaseofCréditduNord,SociétéGéné
raleacquiredanetworkofregionalbanksenablingittostep
upitsretailbankingactivitiesinFrance.In2001,itabsorbed
Sogénal.
SociétéGénéralehasalsoextendeditsinternationalpres
enceandnowhasoperationsin76countriesthroughoutthe
world.
ProFIlE
Société Générale is one of the leading financial ser-
vices groups in the euro zone and is structured into
three major business lines.
Retail Banking and Financial Services
The Retail Banking and Financial Services business line
includes French Networks (Société Générale and Crédit
du Nord), Retail Banking outside France and Financial
Services.
LeadingnonmutualretailbankinFranceintermsof
netbankingincomeandnumberofbranches(source:
SociétéGénéraleandaffiliates)
Morethan19millionretailclientsworldwide
FrenchNetworks
TheSociétéGénéraleandCréditduNordnetworks(along
withsixregionalbanks)servetheneedsofsome9million
individualclientsandseveralhundredthousandbusinesses
andselfemployedprofessionalswithafullrangeoffinancial
productsandservicesthroughmorethan2,800branches.
Backed by a major banking group
ANNuALRepORT2005■SOCIeTeGeNeRALeBANk&TRuST �
RetailBankingoutsideFrance
The universal banking business of the Retail Banking
NetworksoutsideFrancedivisionhasbeengrowingrapidly
since1998,especiallyinCentralandeasterneuropeandthe
MediterraneanBasin.Asaresultofthisexpansion,itnowhas
operationsin27countriesserving5.8millionretailcustomers
andnearly600,000corporateclients.
Financialservices
TheFinancialServicesdivisioncomprisescorporatefinancing
andservices,consumerlending,insuranceandmeansof
payment.
Corporatefinancingandservices
No.1ineuropeinvendorandequipmentfinance(Société
GénéraleequipmentFinance)
No.1ineuropeinITassetleasingandmanagement(eCS)
No.2ineuropeinvehicleleasingandfleetmanagement
(ALDAutomotive)
Individualcustomerfinance
expansionoftheconsumerlendingbusinessviaacquisitions
inGermany,Italy,poland,RussiaandHungary.SociétéGé
néraleConsumerFinancenowhasoperationsin12coun
trieswithleadingpositionsinFrance,ItalyandGermany.
Sogécapprovidesanextensiverangeoflifeinsurance
productstocustomersoftheretailnetworksbothinFrance
andabroad(Morocco,egyptandtheCzechRepublic).
Global Investment Management and Services
The Global Investment Management and Services division
includes the asset management business (Société Générale
Asset Management), private banking (SG Private Banking),
securities services (Société Générale Securities Services) and
online savings (Boursorama).
No.4assetmanagerintheeurozoneintermsofassets
undermanagement(source:SociétéGénéraleand
affiliates)
No.3forsecuritiescustodyineuropeandno.10inthe
world
AssetManagement
SociétéGénéraleAssetManagementisoneoftheleading
assetmanagersintheeurozonewithtotalclientassetsof
euR386billionatDecember31,2005.Thegroupoperates
viafourassetmanagementplatformsinFrance,theunited
kingdom,theunitedStatesandAsia.SociétéGénéraleAs
setManagementoffersinstitutional,corporateandindividual
clientsprivilegedaccesstoafullrangeofassetsclassesin
allfinancialmarkets.
Since2000,SociétéGénéraleAssetManagementhas
beenratedAM2+byFitchRatings–thehighestrating
grantedtoanassetmanagerforitsglobalnetwork(ex
cludingalternativeinvestments).
In2006,forthethirdconsecutiveyear,SociétéGénérale
AssetManagementwasnamedtheBestAssetMana
gerbyFrenchinstitutionalinvestors(Amadeis,February
2006).
� ANNuALRepORT2005■SOCIeTeGeNeRALeBANk&TRuST
privateBanking
Withoperationsin23countries,primarilyineuropeandAsia,
SGprivateBankingisoneoftheprivatebankingleadersin
mostoftheinternationalfinancialmarketswhereithasope
rations.ItcaterstoaclientelewithatleasteuR1millionin
financialassetsthankstotheexpertiseofstaffspecializedin
assetengineeringandassetallocation.Inaddition,itoffers
acompleterangeofglobalfixedincome,equity,commodity
andinvestmentfundproducts.
privateBanker International2005namedSGprivate
BankingtheOutstandingprivateBankforAlternative
Investments.
euromoneynamedittheBestGlobalprivateBankforits
structuredproductoffering.
SecuritiesServices
SociétéGénéraleSecuritiesServices(SGSS)providesafull
arrayofservicesforlistedsecuritiesandderivativeproducts
inallfinancialmarkets.AtDecember31,2005,thelocaland
globalcustody,depositoryandvaluationbusinessestogether
hadeuR1,418billionofassetsundercustodyandnearly
3,800fundsunderadministration.Withitsambitious2006
acquisitionofunicrédit’ssecuritiesservicesbusiness,SGSS
becamethethirdrankedcustodianineurope.
ItsFimatsubsidiary,oneoftheleadinginternationalbrokers,
offerscompetitiveexecutionandclearingservicesforawide
rangeoffinancialproducts.
FitchRatingsraisedSociétéGénérale’sGlobalCustody
ratingtoCu2+,thesecondhighestratingonitsscaleand
uphelditsTR2+Trusteerating.
SGSSwasrankedtheleadingGlobalCustodianbyasset
managementcompaniesintheR&MConsultantssurvey.
Onlinesavings
Boursoramaisaleadingdistributorineuropeofonline
savingsproductswithmorethan460,000clientsandeuR
7.5billionindepositsatDecember31,2005.
BoursoramaisFrance’sleadingonlinebroker.
Corporate and Investment Banking
Société Générale Corporate & Investment Banking groups
together all capital market and financing activities for corpo-
rate clients, financial institutions and institutional investors in
Europe, the Americas and the Asia-Pacific region.
SociétéGénéraleCorporate&InvestmentBankingcombines
innovationandqualityofexecutiontodevelophighvalue
addedfinancialsolutionsinitsthreekeyareasofexpertise:
derivatives,eurocapitalmarketsandstructuredfinance.
No.3incorporateandinvestmentbankingintheeuro
zoneintermsofnetbankingincome(source:Société
Généraleandaffiliates)
Astandardsetterineurocapitalmarkets,derivatives
andstructuredfinance
eurocapitalmarkets
Debtmarkets
No.5foreurodenominatedbondissues
No.4forcorporatebondissues
No.4forfinancialinstitutions
No.7bookrunnerforsyndicatedloansineurope
No.1forsecuritizationineurope
(sources:IFRandeuromoney)
�ANNuALRepORT2005■SOCIeTeGeNeRALeBANk&TRuST
equitiesmarkets
BestequityHouseinFrance(euromoney)
No.8inequitiessalesineurope
Derivatives
BestequityDerivativesHouseoftheYearaccordingto
RiskMagazine,IFRandTheBanker
Top5ininterestrateandcreditderivatives
Top5incommoditiesderivatives
No.14inforeignexchangemarketsandsecondinstruc
turedforexproductsforinvestors
Structuredfinance
No.1globallyinexportandstructuredcommodityfinance
accordingtoTradeFinanceMagazine
GlobalprojectFinanceHouseoftheYearinprojectfinan
cing(pFI)
Professionalism, team spirit and innovation
SociétéGénérale’sthreesharedvalues.
Commitment to sustainable development
Thegroupisincludedinthefourmaininternational
sustainabledevelopmentindexes.
Financial strength
Longtermfinancialratings:AAwithpositiveoutlookby
Standard&poor’s,Aa2byMoody’sandAAbyFitch
(atDecember31,2005).
Consolidated data 2005 2004
200�:inaccordancewithIFRS(excludingIAS32-39andIFRS�)andafterreclassificationoftheSogécapcapitalizationreserve.200�:inaccordancewithIFRS(includingIAS32-39andIFRS�).
results(inmillionsofeuros)Netbankingincome 19,1�0 1�,390Operatingincome �,��� �,��0Netincomebeforeminorityinterests �,92� 3,�23Netincome �,��� 3,281Activities(inbillionsofeuros)Totalassets 8�8.� �01.�Customerloans 22�.2 208.2Customerdeposits 222.� 213.�Groupshareholders’equity 23.� 18.�
2005 KEy FIGurES For THE GrouP
ANNuALRepORT2005■SOCIeTeGeNeRALeBANk&TRuST8
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Société Générale group’s global international network
French Networks, Retail Banking outside France and Specialized Financial Services
Algeria,Australia,Austria,Belgium,Benin,Brazil,Bulgaria,BurkinaFaso,Cameroon,Chad,China,Croatia,Cyprus,CzechRepublic,Denmark,egypt,equatorialGuinea,estonia,Finland,France,Frenchpolynesia,FrenchWestIndies,Germany,Ghana,Greece,Guinea,Hungary,India,Ireland,Italy,IvoryCoast,Japan,Jordan,kazakhstan,Latvia,Lebanon,Lithuania,Luxembourg,Madagascar,Malte,Montenegro,Morocco,Netherlands,NewCaledonia,Norway,poland,portugal,Reunion,Romania,Russia,Senegal,Serbia,Slovakia,Slovenia,Spain,Sweden,Switzerland,Tunisia,Turkey,ukraine,unitedkingdom.
Société Générale Asset Management (SGAM)
Australia,Barhain,China,CzechRepublic,France,Germany,Hongkong,India,Ireland,Italy,Japan,Luxembourg,Monaco,Romania,Singapore,Southkorea,Spain,Taiwan,unitedkingdom,unitedStates.
SG Private Banking
Bahamas,Belgium,Brunei,China,France,Gibraltar,Greece,Guernsey,Hongkong,India,Indonesia,Japan,Jersey,Luxembourg,Monaco,NetherlandsAntilles,Singapore,Switzerland,Thailand,unitedArabemirates,unitedkingdom,unitedStates,uruguay.
retail Banking and Financial Services Asset Management Private Banking
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ANNuALRepORT2005■SOCIeTeGeNeRALeBANk&TRuST 9
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Société Générale Securities Services (SGSS)
Argentina,Australia,Brazil,Canada,China,France,Germany,Greece,Hongkong,India,Ireland,Italy,Japan,Luxembourg,Mexico,poland,Singapore,SouthAfrica,Southkorea,Spain,Switzerland,Taiwan,unitedkingdom,unitedStates.
Société Générale Corporate and Investment Banking (SGCIB)
Argentina,Australia,Austria,Azerbaijan,Belgium,Brazil, Canada, Chile, China, Cuba, France,Germany,India,Indonesia,Iran,Ireland,Italy,Japan,kazakhstan, Luxembourg, Malaysia, Mexico,Netherlands,Norway,panama,philippines,poland,portugal,Singapore,SouthAfrica,Southkorea,Spain,Sweden,Switzerland,Taiwan,Thailand,Turkey,ukraine,unitedArabemirates,unitedkingdom,unitedStates,uzbekistan,Venezuela,Vietnam.
Securities Services Corporate and Investment Banking
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ANNuALRepORT2005■SOCIeTeGeNeRALeBANk&TRuST10
luxembourg-based Société Générale Bank & Trust
(SGBT) provides services to a diversified international
clientele.
HISTory
The road from a commercial bank to a bank with many
lines of business
Sogénal(SociétéGénéraleAlsaciennedeBanque)already
hadasolidbaseintheAlsaceandMoselleregionsasfar
backas1893.Atthattime,itwasthefirstforeignbanktoset
upbusinessintheGrandDuchyofLuxembourg.until1940,
itrana10branchnetworkintheduchy.
ThesecondworldwarforcedSogénaltoshutdown,butit
resumedbusinessin1956.Asearlyas1964,italreadyhad
internationalorganizationsandmajorLuxembourg,French
andGermangroupsasclients.Itwasapioneerincorporate
financeandcashmanagement.
Sogénalalsodevelopedinotherareassuchasfinancialen
gineeringandmutualfundmanagement.Overthe1970sand
1980s,itacquiredrealexpertiseinsecuritiesandmutual
funds,andwasoneofthefirstbankstocreateumbrellamu
tualfundswithaeuropeanpassport.
In1981,SogénalacquiredLuxbanque,aprivatebanking
specialist.Sinceitreopened,ithasalsobeenveryactivein
capitalmarkettransactions.Itstradingroomisoneofthe
biggestinLuxembourgandenablesittoofferitshighnet
worthcustomersacomprehensiverangeofcustomizedand
personalizedproductsinadditiontoconventionalmoneymar
ketproducts.
In1995,SogénalandLuxbanquemerged,givingrisetoSo
ciétéGénéraleBank&Trust(SGBT),whichincludedSogé
nal’sSwissbranches(Zurich,GenevaandLugano).SGBT
expandeditsactivitiesintoprivatebankingfirstbysettingup
aspecializedsubsidiaryinMonaco(SGBTMonaco).Then,in
1998,itacquiredaZurichbasedprivatebankcalledRüegg
Bank.In2003,itacquiredCompagnieBancaireGenève,enab
lingittoconsolidateitsSwissoperationsbyforminganew
entitycalledSGprivateBanking(Switzerland).
In2003,SGBTalsospunoffitscentralizedinvestmentfund
administrationbusinessintoeuroVLLuxembourgS.A..
Morerecently,in2005,SGBTincreasedthescopeofitsprivate
bankingbusinessbysettingupanewbranchinSingapore
bytakingoverSociétéGénérale’sprivatebankingactivities
there.
Today,asaresultofitshistoryandabilitytoinnovate,SGBTis
abankwithmanylinesofbusiness.Startingoutincorporate
banking,itgraduallyturnedtoinstitutionalclients(Securities
services)andhighnetworthclients(privateBanking)building
onitsbusyfrontoffice.
SGBT, the advantages of a bank with many lines of business
ANNuALRepORT2005■SOCIeTeGeNeRALeBANk&TRuST 11
ProFIlE
Four major business lines linked to those of Société
Générale
Private banking and capital markets
Recognized expertise and customized services for high net
worth individuals
SociétéGénéraleBank&TrustisamemberofSociétéGé
nérale’sglobalSGprivateBankingnetworkandoperates
privatebankingbusinessesinLuxembourg,Switzerlandand
Monacoand,since2005,inSingapore.Itprovideshighnet
worthindividualswithacomprehensiveapproachtotheir
needsthroughadvisoryandassetengineeringservices.It
alsoprovidesawiderangeofopenarchitectureproducts
thatareamongthebestavailableonthemarket.
Bankingservicesandinvestmentadvice
Assetengineeringandtaxplanning
Assetmanagement(discretionary,advice,trading)
Servicestoexpatriates
Lifeinsurance
A dynamic, innovative trading room
SGBT’sfrontofficeinLuxembourgactivelyservestheneeds
ofthecorporate,institutionalandprivateclientsoftheglobal
SGprivatebankingnetwork,offeringarangeofstructured
solutionswiththeappropriateexpertiseforeachtypeofun
derlyingsecurity(equities,fixedincome,foreignexchange,
commodities,etc.).Onceagainthisyear,SGprivateBanking
wasnamedthebestglobalprivatebankforitsstructured
productofferingbyeuromoney.
Corporate services
A diversified, innovative offering for businesses
Becauseitstartedoutasacommercialbank,SGBT’sLuxem
bourgoperationcanfundthegrowthofbothlocalbusinesses
aswellasmajormultinationalcorporationsthroughouttheir
entirelifecycle.Itspersonalizedofferingisdesignedforall
typesofcompaniesandfeaturesservicesrangingfromdaily
cashmanagementandadviceonincorporatingbusinesses
underLuxembourglaw,totheimplementationofstructured
financearrangements.Tocomplementitslocalcapabilities,
SGBTalsoregularlycallsonthesupportoftheinternational
networkofSociétéGénérale’sCorporateandInvestment
bankingdivision.
Corporatebanking
Financialengineering
Cashmanagement(domesticandinternational)
Securities services
A comprehensive line of services designed for institutional
clients, fully integrated into the Société Générale Securities
Services (SGSS) network
InLuxembourg,SGBTanditseuroVLLuxembourgsubsidiary
provideinvestorswithabroadrangeofservicescoveringall
theirrequirementsforallassetclasses,onallmajorinterna
tionalmarkets.
Depositoryandcustodianbank
Fundadministration(euroVLLuxembourg)
Thirdpartyfundtrading
Issuerservices
ANNuALRepORT2005■SOCIeTeGeNeRALeBANk&TRuST12
Consolidated data 2005 2004
(inbillionsofeuros)
Totalassets 28.8 21.�
Shareholders’equity 1.� 1.�
Customerloans 10.9 �.1
Customerdeposits 12.� 8.2
(inmillionsofeuros)
Netbankingincome 388.0 3�1.1
Grossoperatingincome 202.0 180.�
Netincome 1��.� 1��.0
KEy FIGurES For SGBT IN 2005
WithSociétéGénérale’sacquisitionofunicrédit’ssecurities
servicesbusinessinearly2006,theLuxembourgoperation
willagainstrengthenitsdepositoryandcustodian,fundadmi
nistrationandtransferagentbusinesses,becomingaleader
inthisareainLuxembourg.
SGBT has a solid financial base and is fully integrated
into Société Générale’s commercial structure. As a
result, Standard & Poor’s has assigned SGBT a long-
term rating equivalent to Société Générale’s AA- with
a positive outlook.
ANNuALRepORT2005■SOCIeTeGeNeRALeBANk&TRuST 13
SGBT orGANIzATIoN CHArT
Société Générale Group
Société Générale Bank & Trust S.A. Group
100%
SociétéGénérale
Bank&TrustSingapore
succursale
SociétéGénérale
Bank&TrustMonacoS.A.M.
100%
SGPrivateBanking
S.A.(Suisse)
��.�2%
Euro-VLLuxembourg
S.A.
��%
Immobilièredel’Arsenal
S.à r.l.CoparerB.V.
100%
SogelifeS.A.
�9%
MontalisInvestment
B.V.
9�%
SGBTFinance
IrelandLimited
100%
SGBTEuropean
CitiusInvestmentS.A.
99.99%
SGPrivateBanking
(Curaçao)N.V.
100%
SGPrivateBanking
(Lugano–Svizzera)S.A.
100%
Thefollowingwereaddedtotheorganizationin2005:
Twonewsubsidiaries:SGBTFinanceIrelandLtd.and
SGBTeuropeanCitiusInvestmentS.A.arefinancialcom
panieswhosemainbusinessistoprovidefinancingto
companies.
Anewbranch:SociétéGénéraleBank&TrustSingapore,
dedicatedtoprivatebanking.
ANNuALRepORT2005■SOCIeTeGeNeRALeBANk&TRuST1�
BoArd oF dIrECTorS
CHAIRMAN
Pierre MATHÉ
GlobalHeadofprivateBanking,SociétéGénérale
CHIeFexeCuTIVeOFFICeR
Albert lE dIrAC’H
DIReCTORS
Alain CloSIEr
GlobalHeadofSecuritiesServicesforInvestors,
SociétéGénérale
Philippe CollAS
ChiefexecutiveOfficer,
GlobalInvestmentManagementandServices,
SociétéGénérale
Bernard dAvId
DeputyHeadofprivateBanking,SociétéGénérale
August GruBEr
ChiefFinancialOfficer,privateBanking,SociétéGénérale
MANAGEMENT CoMMITTEE
exeCuTIVeCOMMITTee
Albert lE dIrAC’H
Chairman
vincent dECAlF
Cochairman
Jean-Charles FErrÉ
CorporateSecretary
Michel BECKEr
régis MEISTEr
Pierre SCHWENGlEr
STATuTory AudITorS
Ernst & young
6,rueJeanMonnet
L2180Luxembourg
SGBT Board of Directors, Management Committee and Operational Management
ANNuALRepORT2005■SOCIeTeGeNeRALeBANk&TRuST 1�
oPErATIoNAl MANAGEMENT
(Luxembourg, Switzerland, Monaco, Singapore)
SoCIÉTÉ GÉNÉrAlE BANK & TruST
(luxEMBourG)
11,avenueemileReuter
B.p.1271
L1012LuxeMBOuRG
Tel.:(352)4793111
Fax:(352)228859
email:[email protected]
www.sgbt.lu
Albert lE dIrAC’H
ChiefexecutiveOfficer
HélèneCRINquANT,HumanResources
JeanCOIGNARD,AssetandLiabilitiesManagement
GillesMONTANGeRAND,InternalAudit
RenéDALVIT,Secretary,BoardofDirectors
vincent dECAlF
Manager,privateBankingandCapitalMarkets
Private Banking
AlainROBILLARD,MarketingandSalesManagerandMajor
privateInvestors
GhislaindeWASSeIGe,MarketingandSalesCoordination
DanielDIDIeR,Operations
philippekeNIS,Development
StéphaneWATHIeR,AssetManagement,productsand
Investment
ClaudioBACCeLI,Assetengineering
NicolepOLLeFORT,SeniorBanker
Capital Markets
StéphaneCHReTIeN,MarketOperations
NicolasCAGINICOLAu,Sales
BertrandkAuFFMANN,Treasury
RalfkRAY,Forex
Michel BECKEr
Manager,SecuritiesServices
philippeTOTAL,DeputyHead
RégisVeILLeT,Sales
régis MEISTEr
Manager,CorporateBanking
OlivierpeLSSeR,CorporateBanking
YvesCACCLIN,CorporateFinancialengineering
xavierBLOuIN,Development
Jean-Charles FErrÉ
CorporateSecretary
ericBeRLING,Finance
GuillaumedeSéVeRAC,Risk
RolandBeRSCHeID,Compliance
Pierre SCHWENGlEr
Manager,Administration
LucDOSqueT,ITResearchandOperations
emmanuelLADAIque,CapitalMarketsBackOffice
JeanMariekROL,paymentSystemsBackOffice
HabibSAGHBINI,Organization
ANNuALRepORT2005■SOCIeTeGeNeRALeBANk&TRuST1�
SuBSIdIArIES
SG PrIvATE BANKING (SuISSE) S.A.
6,ruedelaCorraterie–Casepostale5022
CH1211GeNeVe11
Tel.:(41)228190202
Fax:(41)228190403
www.sgprivatebanking.ch
Bernard SoNNTAG
ChiefexecutiveOfficer
Joseph ToSoN
SeniorexecutiveVicepresident
Alberto vAlENzuElA
SeniorexecutiveVicepresident
Jean-François PAQuErEAu
SeniorexecutiveVicepresident
zurICH BrANCH
Talstrasse66–postfach
CH8021ZuRICH
Tel.:(41)442185611
Fax:(41)442116416
lAuSANNE BrANCH
AvenuedeRumine20–Casepostale220
CH1001LAuSANNe
Tel.:(41)213431212
Fax:(41)213431213
SG PrIvATE BANKING (luGANo-SvIzzErA) S.A.
VialeStefanoFranscini22–Casellapostale5830
CH6901LuGANO
Tel.:(41)919237642
Fax:(41)919220808
MIAMI rEPrESENTATIvE oFFICE
SGprivateBanking(Suisse)S.A.
701BrickellAvenue–Suite1740
uSAMIAMIFL33131
Tel.:(1)3053793221
Fax:(1)3053793696
SG PrIvATE BANKING (CurAçAo) Nv
Gaitoweg35–p.O.Box4729
CuRAçAO–NeTHeRLANDSANTILLeS
Tel.:(599)97366760
Fax:(599)97366868
MoNTEvIdEo rEPrESENTATIvE oFFICE
SGPB (SuISSE) S.A
WorldTradeCenterMontevideo–Torre1
Avda.LuisAlbertodeHerreraN°1248
Oficinas1902–1903
uRuGuAY–11300MONTeVIDeO
Tel.:(598)26232840
Fax:(598)26232841
ANNuALRepORT2005■SOCIeTeGeNeRALeBANk&TRuST 1�
SoCIÉTÉ GÉNÉrAlE BANK & TruST (MoNACo)
1315,BoulevarddesMoulins–B.p.250
MC98007MONACOCeDex
Tel.:(377)97975800
Fax:(377)97975876
email:[email protected]
www.sgprivatebanking.com/monaco
Christian zErry
GeneralManager
Jean-Claude GrACIA
CorporateSecretary
Gérard oHrESSEr
privateBankingManager
BrANCH
SoCIÉTÉ GÉNÉrAlE BANK & TruST (SINGAPorE)
28thFloor,80RobinsonRoad
Singapore068898–SINGApORe
Tel.:(65)63267333
Fax:(65)62250187
email:[email protected]
www.sgprivasia.com
ManagementCommittee
daniel TruCHI
Patrick drEyFuSS
ChiefFinancialOfficer
Philippe GruMBErG
HeadofMarketingandSales
Pierre BAEr
lagune
January2003
CarolineDujardin
■ Management report
ANNuALRepORT2005■SOCIeTeGeNeRALeBANk&TRuST20
BuSINESS rEvIEW
SGBT’sfinancialresultsfor2005wereachievedinanenviron
mentfeaturingaturnaroundineuropeanstockmarketsanda
businessclimatefavorabletofinancialactivities.Allbusiness
linesandalloftheentitiescontrolledbySGBTfullybenefited
fromthissituation.
privateBankingcustomerswereparticularlyactiveresultingin
asharpincreaseinthenumberofstockmarkettradesanda
cleargainforalternativeinvestments.Inaddition,theSociété
GénéraleGroup,andinparticularSGBT,wererecognizedby
euromoneyasthebestglobalandregionalprivateBanking
institutionsintermsofstructuredproducts.
Theassets frominstitutional investorsheld incustody
andadministeredbySGBTincreasedsharplythankstoa
combinationofsustainedfundsgatheringeffortsandthe
marketeffect.
Intheareaofcorporateservices,theLuxembourgunitshowed
itsvitalityinbothcorporatebanking,financialengineeringand
cashmanagement.
Asaresult,allgroupentitiesaddedbothsalesandsupport
servicestaff,astheworkforceincreasedtoanaverageof
1,272employeesin2005,upfrom1,028in2004.Thismade
itpossibletohandletheincreaseinbusinesswhileenhan
cingthequalityofourserviceandriskcontrol.Wewerealso
abletocomplysatisfactorilywiththeeuropeandirectiveon
thetaxationofsavingsincomeandthetransitiontoIFRS,as
partofthereportingrequirementstoourparentcompanyand
heightenedcompliancerequirements.
In2005,wecontinuedtoapplyourcreditandmarketrisk
policy,whosepurposeistosupportsaleswhilebeingse
lectiveinordertoavoidharmingtheintrinsicqualityofthe
portfolio.Allofthecomponentsofthecostofrisk(creditand
operational)remainedatalowlevel,givenbusinessvolumes,
whileoperatingexpensescontinuedtobeheldincheck.
Inall,profitabilitywassatisfactory,particularlysincethestrong
performanceofourbusinesslineswasoffsetbyvariousex
ceptionalprudentialitemssuchastheincreaseingeneral
provisions.
SGBT’sconsolidationscopegrewwiththesettingupofa
branchinSingapore.ThebranchbeganoperationsonNo
vember4,2005,furthertothetakeoveroftheprivateban
kingbusinesspreviouslyrunbySociétéGénérale’sSingapore
branch.Withaworkforceof148atDecember31,2005,the
newSGBTSingaporebranchcontributedeuR2,454million,
or9%oftotalconsolidatedassets.
Standard&poor’sconfirmedSGBT’ssolidfinancialstruc
turebyassigningitaratingequivalenttoSociétéGénérale’s
AAwithapositiveoutlook.
2005netbankingincomeroseby12%toeuR388million
comparedto2004.GrossoperatingincomereachedeuR
202million,upby9%from2004,and2005net income
amountedtoeuR145.7million.
SGBTdidnotbuybackanyofitsownsharesin2005.
Business review and outlook
ANNuALRepORT2005■SOCIeTeGeNeRALeBANk&TRuST 21
ouTlooK
Nosignificanteventlikelytomodifythefinancialstatements
at31December2005tookplaceateitherSGBToranyofits
subsidiariesandbranchessincetheendoftheyear.
Ateachentity,initiativesin2006havebeenacontinuationof
thoseembarkedonin2005inorderforourstafftobecome
moreproactiveintermsofsalesandtooffernewproducts
andservicestoourclientsaspartoftheSociétéGénérale
Group’sstrategy.
Inearly2006,SGBTtookovertheprivateBankingbranches
inGreece(nowknownasSGBTHellas)thatwerepreviously
runbySociétéGénérale.
SGBTSingaporeprojectsthatitsbusinesswillcontinueto
growasaresultofstrongeconomicgrowthinAsiaandan
increaseofstaffinitiatedin2005,withaspecificfocuson
teamsdedicatedtoIndianexpatriates.
In2006,SGprivateBankingSuisseisexpectedtocontinueto
poststronglevelsofnetbankingincomeandfundsgathered
asaresultofthesynergiesbetweenthemergedentities(SG
RüeggBankandCompagnieBancaireGenève)andSociété
Générale.
SGBT’sscopecouldgrowagainin2006withthepossible
additionofaprivateBankingbranchinHongkongwhichis
currentlyunderstudy.However,nodatehasbeensetforthe
openingofthebranch.
In2006,allSGBTentitieswillcontinuetobringtheiropera
tionalandcreditriskmonitoringandmanagementprocesses
intolinewithinternationalcapitaladequacyrequirements(Ba
selII).progressiscurrentlyinlinewithinitialtimetables.
ANNuALRepORT2005■SOCIeTeGeNeRALeBANk&TRuST22
Consolidatednetincome(aftertax,depreciation,amortizationand
provisions)for2005amountedtoeuR145,686,617compared
witheuR146,996,462in2004,asrecordedintheconsolidated
statementsofprofitandloss.
Consolidated shareholders’ equity
AtDecember31,2005,consolidatedshareholders’equity
amountedtoeuR1,652,372,441afterdistribution.Including
subordinateddebtofeuR126,224,508andeuR17,254,770
inreservesrelatingtoreinvestmentofcapitalgains,totalshare
holders’equityamountedtoeuR1,795,851,719.
Luxembourg, March 9, 2006
Albert LE DIRAC’H Jean-Charles FERRÉ
Consolidated net income of Société
Générale Bank & Trust Group
■ Market risks at december 31, 2005
Etang blanc
May2004
CarolineDujardin
ANNuALRepORT2005■SOCIeTeGeNeRALeBANk&TRuST2�
Theorganizationofmarketriskmanagementisconstantly
upgradedwithaviewtoharmonizingexistingcontrolproced
uresthroughouttheSociétéGénéralegroupandensuringits
completeindependencefromalloperationalfunctions.
Frontlineresponsibilityformanagingmarketrisksnaturally
lieswiththefrontofficemanagersbuttheoverallmarketrisk
controlsystemissupervisedbyanindependentunit,the
MarketRisksDepartment,whichisresponsiblefor:
Dailymonitoring,independentlyfromthefrontoffice,ofthe
positionsandrisksarisingfromallofthemarketactivities,
andcomparisonofthesepositionsandriskswithauthor
izedlimits,
Definingmethodsformeasuringmarketrisksandestab
lishingcontrolprocedures,andvalidatingthevaluation
modelsusedtocalculaterisksandresults,
Developingthespecificdatabasesandsystemsrequired
formarketriskassessment,
Reviewingapplicationsformarketrisklimitsreceivedfrom
alloperatingunits,withintheglobalauthorizationsgranted
byGeneralManagement,andmonitoringtheireffective
utilization,
Centralizingandconsolidatingthemarketrisks.
Controllershavebeendesignatedtoimplementthecontrol
proceduresthatrepresentthefirstlevelinthemarketrisk
controlsystem.Themaintasksoftheseriskcontrollers,who
areindependentfromthefrontoffice,include:
Regularmonitoringofpositionsandresultsinliaisonwith
thefrontofficedepartments,
Dailyverificationofthemarketparametersusedtocalcu
laterisksandresults,
Dailycalculationofmarketrisksbasedonaformal,secure
procedure,
Dailymonitoringofcompliancewiththeexposurelimitsset
foreachactivityandregularverificationthatappropriate
exposurelimitshavebeensetforallactivities.
Inadditiontotheabovesystemofroutinecontrolsovermarket
risks,periodicexaminationsarealsoperformedbySociété
GénéraleBank&Trust’sinternalauditorsandbyauditors
fromtwoofSociétéGénérale’scontrolentities:theCorporate
andInvestmentBankingDivisionauditunitandtheGroup’s
InternalAuditDivision.
SociétéGénéraleBank&Trust’smarketriskmonitoringpolicy
consistsinsettinglimitsforallmarketactivities.Afterap
provalbySociétéGénérale’sRisksDivision,theselimitsare
releasedbytheManagingDirectorofSociétéGénéraleBank
&Trust.LuxembourgMonetaryInstitutecircularsIML93/101
and95/119establishingregulationsfortheorganizationand
internalcontrolofcreditinstitutions’marketactivitiesrequire
strictsupervisionoftheseactivities.Thetwocircularsalso
establishthattheManagementCommitteeandthemanagers
registeredbytheauthoritiesinaccordancewithLuxembourg
bankinglawassumejointresponsibilityforthepoliciesre
gardingmarketactivitiesandthequalityoforganizationin
thisarea.
Organization of risk control
ANNuALRepORT2005■SOCIeTeGeNeRALeBANk&TRuST 2�
ThemarketriskmeasurementsystematSociétéGénérale
Bank&Trustisbasedonacombinationofthreeindicators,
forwhichlimitsareimplemented:
AValueatRisk(VaR)model,withaconfidenceintervalof
99%,whichcomplieswithinhouseregulatoryrequirements.
usingthissyntheticindicator,thebankcanmonitoritsmar
ketrisk,inparticularintradingbusiness,onadailybasis,
StressTestmeasurements,basedonaonceinadecade
riskindicator.StressTestmeasurementsenabletheBank
tolimititsexposuretosystemicrisksandthosecausedby
exceptionalmarketmovements,
Additionalsetsoflimits(sensitivity,nominal,etc.)thatensure
consistencybetweenoverallrisklimitsandtheoperational
limitsusedbythefrontofficedepartments.Theselimitsare
alsousedtoidentifyandmanagerisksthatwouldnotbe
addressedadequatelybyVaRandStressTestindicators.
vAluE AT rISK WITH A CoNFIdENCE INTErvAl
oF 99% (vAr)
TheVaRindicatorwasdevelopedattheendof1996andis
beingimprovedcontinuously,notonlythroughtheaddition
ofnewriskfactors,butalsobyextendingthescopeofVaR
monitoring.
Themethodusedisthe“historicsimulation”methodwhich
implicitlytakesintoaccountcorrelationsbetweenthevari
ousmarketsandtheabnormaldistributiontrendsformed
bydeviationsinmarketparameters.
Themethodisbasedonthefollowingprinciples:
Developmentofhistoricalmarketparametersthatare
representativeoftheriskgeneratedbySociétéGéné
raleBank&Trust’spositions(interestrates,shareprices,
foreignexchangerates,commoditiesprices,volatilities,
creditspreads,etc.).Alltold,theVaRindicatoriscalculated
basedonnearly10,000riskfactors.
Determinationof250scenarioscorrespondingtodevia
tionsintheseparametersoveraonedaytimehorizon,
observedoverarollingoneyearperiod,
Adjustmentofonedayparametersbasedonthesescen
arios,
Revaluationofdailypositionsbasedonthese250adjusted
onedaytimehorizonmarketparameters.Thisrevaluation
takesintoaccountthenonlinearityofpositions.
TheVaRwitha99%confidenceintervalcorrespondstothe
maximumpotentialriskafterexcludingthe1%chancethat
losseswillexceedthecalculatedamountduringthespecified
period.Basedononeyear’shistoricaldata,i.e.250scen
arios,itcorrespondstotheaveragebetweenthesecondand
thethirdlargestrisksobserved.
THE METHodoloGICAl lIMITATIoNS oF THE
vAr METHod
TheVaRmeasurementsystemisbasedonamodeland
conventionalassumptions.Asaresult,themainmethodolo
gicalshortcomingsarethefollowing:
Ituses“oneday”shocks,withtheunderlyingassumption
thatallpositionscanbeliquidatedorhedgedinoneday,
butthisisnotalwaystrueforsomeproductsandincertain
crisissituations.
Itusesa99%confidenceinterval,whichdoesnottake
intoaccountanypotentiallossesabovethislevel.VaRis
thereforeanindicatorofpotentiallossesincurredunder
normalmarketconditionsanddoesnottakeintoaccount
exceptionalmovements.
Methods for measuring market risks and setting exposure limits
ANNuALRepORT2005■SOCIeTeGeNeRALeBANk&TRuST28
VaRiscalculatedatmarketclose,andintradaymarket
fluctuationsarenottakenintoaccount.
SociétéGénéraleBank&Trusttakesthefollowingstepsto
covertherisksinherentinthemethod:
Systematicevaluationofthemodel’svalidity,bymeansof
backtesting,whichverifiesthatthenumberofdayswith
alossinexcessoftheVaRcomplieswiththe99%confi
denceinterval.ThishasbeenthecaseeversincetheVaR
methodwasintroduced.Thisbacktestingisconducted
foreverybusinessunitsubjectedtoVaRmonitoring.The
processisthereforevalidatedbothattheoverallleveland
atthelevelofeachsubunit.Fromapurelystatisticalstand
point,2or3overrunsperyearwouldstillbecompatible
withthe99%confidenceintervalused.
undertaking“StressTest”measurementstocomplement
theVaRsystem.
STrESS-TEST METHod
InadditiontotheinternalVaRmethod,SociétéGénérale
Bank&TrusthasdecidedtocontinueusingtheStressTest
measurementsystemtotakeintoaccountexceptionalmarket
disruption.TheStressTestmeasurementsystemisbasedon
18historicalscenariosand8theoreticalscenariosincluding
the“theoreticalSociétéGénéralescenario”usedsincethe
early1990s.TogetherwiththeVaRmeasurementsystem,it
isoneofthemajorpillarsoftheriskcontrolsystem.
TheStressTestriskisbasedonthefollowingprinciples:
Thehistoricalscenariosresultfromasystematicmethodo
logicalapproachwhichaimstopinpointextremeshocks
thathavetakenplacesince1987onthemaincapitalmar
ketsandwhicharelikelytoresultinheavylossesforthe
bank.
Thetheoreticalscenariosaredevisedbythebank’seco
nomistswiththeaimofidentifyingfuturechainsofevents
thatcouldleadtomajormarketcrises.Theyareselected
usingamethodthataimstoincorporateshocksthatare
bothextremeandplausibleandthatcouldhaveanoverall
impactonallmarkets.
Risksarecalculateddailyforeachofthebank’smarket
businesslines,forallproductstakenasawhole,using
eachofthe18historicalscenariosandthe8theoretical
scenarios.
StressTestlimitsaresetforSociétéGénéraleBank&
Trust’soverallbusinessandeachofitsvariousbusiness
lines.First,theytakeintoaccounttheworstresultresulting
fromthe26newhistoricalandtheoreticalscenarios.
LiketheVaRmeasurementsystem,thisoverallsystemof
measuringriskusinghistoricalandtheoreticalStressTest,
constitutesoneofthemajorpillarsoftheregulatorymodel
forcontrollingrisks.
ThevariousStressTestscenariosarerevisedandaddedto
onaregularbasis,workingwiththeeconomistsofSociété
Généralegroupandthevariousspecialistsundertheaegis
ofSociétéGénéralegroup’sRisksDivision.
Inadditiontotheaboveriskassessmentmethodsandlimits,
marketrisksmustcomplywiththebank’scounterpartrisk
policy.
ANNuALRepORT2005■SOCIeTeGeNeRALeBANk&TRuST 29
SociétéGénéraleBank&Trusthasnocommitmentsoncredit
derivatives,andavoidsusinginstrumentsinvolvinghighcoun
terpartormarketliquidityrisks.
TheBankdealswithtoptierOeCDfinancialinstitutions,concen
tratingitsrisksonbanksintheeuropeaneconomicArea,the
uSA,andCanada.Foroptimumcontrolofthecounterpartrisk
oninterbankcontractsand,inparticular,toavoidsystemicrisk,
SociétéGénéraleBank&Trustplacesgreatimportanceon
usinginternationalmasteragreements,suchastheISDAMaster
Agreement(forderivatives),theFrenchFBF“ConventionCadre”
(forfinancialinstruments,forwardorotherwise),andtheGlobal
MasterRepurchaseAgreement(forsecuritieslending),which
provideforglobalnetting.Theseagreementsprovideprotection
againstdebtorinsolvency,allowingforterminationofcontractual
relationswherenecessary.
TheexposureofSociétéGénéraleBank&Trust’sbondportfolio
mainlyconcernssovereignrisksineucountries,theuSAand,
toalesserextent,Japan.
Counterpart risk policy
ANNuALRepORT2005■SOCIeTeGeNeRALeBANk&TRuST30
Type of risk Assumptions used Impact at31/12/04
Impact at30/12/05
(*)categoryAcurrencies:euR,uSD,JpY,CHF,GBp,CAD,AuD,NZD,Dkk,NOk,Sek categoryBcurrencies:ISk,kRW,pLN,CZk,SGD,TWD,MxN,HuF,Skk categoryCcurrencies:BRL,CNY,HkD,ILS,INR,SIT,THB,ZAR categoryDcurrencies:allothercurrencies
Exchangeraterisk Adversemovements,measuredbycurrency,basedon:
Operationalforeign forcurrenciesincategoryA(*): 0.1MeuR 0.1MeuR
exchangepositions movementincurrencyposition:
shorteuRposition:6%,longeuRposition:+6%
forcurrenciesincategoryB(*):
movementincurrencyposition:
shorteuRposition:10%,longeuRposition:+6%
forcurrenciesincategoryC(*):
movementincurrencyposition:
shorteuRposition:15%,longeuRposition:+10%
forcurrenciesincategoryD(*):
movementincurrencyposition:
shorteuRposition:30%,longeuRposition:+10%
Interestraterisk Adversemovementsininterestratesbycurrencycategory:
sharpupwardmovement:
overnightrate:100%to350%,1weekrate:60%to300%,
1yearrate:12%to70%,10years+rate:8%to50%
sharpdownwardmovement: 4.2MeuR 4.6MeuR
overnightrate:50%to77%,1weekrate:30%to75%,
1yearrate:12%to45%,10years+rate:8%to42%
Société Générale Bank & Trust Luxembourg Market transaction risks
Mare bleue
November2003
CarolineDujardin
■ Consolidated financial statements
ANNuALRepORT2005■SOCIeTeGeNeRALeBANk&TRuST 3�
TotheBoardofDirectorsofSociétéGénéraleBank&TrustS.A.Luxembourg
FollowingourappointmentbytheBoardofDirectors,wehaveauditedtheaccompanyingconsolidatedfinancial
statementsofSociétéGénéraleBank&TrustS.A.fortheyearendedDecember31,2005andhavereadtherelated
consolidatedmanagementreport.Theconsolidatedfinancialstatementsandtheconsolidatedmanagementreportare
theresponsibilityoftheBoardofDirectors.Ourresponsibilityistoexpressanopinionontheseconsolidatedfinancial
statementsbasedonourauditandtocheckthattheconsolidatedmanagementreportisconsistentwiththem.
WeconductedourauditinaccordancewithInternationalStandardsonAuditing.Thesestandardsrequirethatwe
planandperformtheaudittoobtainreasonableassuranceaboutwhethertheconsolidatedfinancialstatements
arefreeofmaterialmisstatement.Anauditincludesexamining,onatestbasis,evidencesupportingtheamounts
anddisclosuresintheconsolidatedfinancialstatements.Anauditalsoincludesassessingtheaccountingprinciples
usedandsignificantestimatesmadebytheBoardofDirectorsaswellasevaluatingtheoverallconsolidatedfinancial
statementspresentation.Webelievethatourauditprovidesareasonablebasisforouropinion.
Inouropinion,theattachedconsolidatedfinancialstatementsgive,inconformitywiththeLuxembourglegaland
regulatoryrequirementsatrueandfairviewoftheconsolidatedfinancialpositionofSociétéGénéraleBank&Trust
S.A.atDecember31,2005andtheconsolidatedresultsofitsoperationsfortheyearthenended.
Theconsolidatedmanagementreportisconsistentwiththeconsolidatedfinancialstatements.
eRNST&YOuNG
SociétéAnonyme
IndependentAuditor
Jean-Michel PACAUD
Luxembourg, March 9, 2006
Report of the Independent Auditor
ANNuALRepORT2005■SOCIeTeGeNeRALeBANk&TRuST3�
Theaccompanyingnotesareanintegralpartoftheseconsolidatedfinancialstatements.
ASSETS 2005 2004
Cash, due from central banks and post office accounts 141,678,139 68,316,522
Loans and advances to credit institutions (Notes 4, 10, 28, 34) 9,784,556,786 8,500,261,098
Demand ���,�9�,0�9 ���,3�8,89�
Otherreceivables 9,01�,8�9,�1� 8,0��,882,202
Loans and advances to customers (Notes 4, 10, 34, 35) 10,914,045,804 7,121,839,555
Debt securities and other fixed-income debt securities
(Notes 5, 6, 11, 34) 6,023,566,370 4,764,291,420
Treasurynotesandsimilarsecurities �,889,22�,�90 �,�08,198,30�
Bondsandotherdebtsecurities 1,13�,339,�80 2��,093,11�
Shares and other variable-yield securities (Notes 6, 11) 1,057,477,472 333,030,579
Participating interests (Notes 5, 6, 7) 15,056,261 458,768
Shares in affiliated undertakings (Notes 5, 6, 7, 34, 37) 3,862,456 3,805,747
Shares in affiliated undertakings accounted
for by the equity method (Note 7) 6,527,594 5,750,933
Intangible fixed assets (Note 5) 11,065,183 4,985,776
Goodwil (Note 8) 154,424,311 167,218,813
Currency translation differences - 795,560
Tangible fixed assets (Note 5) 32,544,014 32,894,222
Other assets (Note 9) 61,340,032 39,851,312
Prepayments and accrued income 600,786,798 396,643,719
28,806,931,220 21,440,144,024
Consolidated balance sheet at December 31, 2005 (in EUR)
ANNuALRepORT2005■SOCIeTeGeNeRALeBANk&TRuST 3�
lIABIlITIES ANd SHArEHoldErS’ EQuITy 2005 2004
Amounts owed to credit institutions (Notes 12, 13, 34) 12,231,138,805 9,545,006,932
Demanddeposits 1,20�,9��,89� �33,108,901
Termdepositsandsubjecttonotice 11,02�,1�0,910 8,911,898,031
Amounts owed to customers (Notes 12, 34) 12,680,573,048 8,236,514,629
Savingsdeposits - ��,�18
Otherdeposits:
Repayableondemand 3,�39,393,8�� 2,18�,3�3,321
Withagreedmaturitydatesorperiodofnotice 9,0�1,1�9,202 �,0�0,10�,�90
Debts evidenced by certificates (Notes 14, 34) 1,076,901,401 979,084,554
Bondborrowings 8�,���,31� ��,2�1,20�
Relatedpayables 992,13�,08� 90�,813,3�8
Other liabilities (Note 15) 94,008,973 178,779,051
Accruals and deferred income 576,728,750 465,962,211
Provisions for liabilities and charges 93,242,845 78,258,828
Provisionsforpensionsandsimilarobligations 9,3�9,239 8,��3,9�8
Provisionsfortaxes(Note32) ��,119,�13 �0,112,332
Otherprovisions(Note1�) 2�,��3,993 29,392,�38
Subordinated debt (Notes 17, 34) 171,946,327 182,639,516
Special items with a reserve quota portion (Note 18) 17,254,770 17,254,770
Fund for general banking risks (Note 19) 2,250,601 2,250,601
Subscribed capital (Note 20) 1,179,042,732 1,179,042,732
Share premium (Note 20) 2,816,416 2,816,416
Consolidated reserves (Note 21) 103,238,421 74,167,413
Minority interests 44,176,419 35,853,142
Currency translation differences 292,981 -
Retained earnings 387,632,060 315,516,767
Net income for the year 145,686,671 146,996,462
Netincome 13�,��8,2�� 138,3��,�0�
Minorityinterests 11,038,�2� 8,��1,0��
28,806,931,220 21,440,144,024
Theaccompanyingnotesareanintegralpartoftheseconsolidatedfinancialstatements.
ANNuALRepORT2005■SOCIeTeGeNeRALeBANk&TRuST38
Theaccompanyingnotesareanintegralpartoftheseconsolidatedfinancialstatements.
2005 2004
Contingent liabilities (Notes 23, 34) 339,235,544 257,738,569
Ofwhich:
[Acceptancesandcommitmentsonendorsements
ofrediscountedbills] [1,019,0��] [�8,29�]
[Guaranteesandassetspledgedascollateral] [110,���,3��] [��,1�9,��9]
Commitments (Notes 24, 34) 1,712,888,375 295,498,730
Fiduciary operations (Note 34) 2,481,486,059 2,253,470,931
Off-balance sheet items at December 31, 2005 (in EUR)
ANNuALRepORT2005■SOCIeTeGeNeRALeBANk&TRuST�0
2005 2004
Interest and similar income 1,070,681,982 906,971,345
Ofwhich:[Fromfixed-incomesecurities] [1�8,���,990] [13�,��3,�91]
Interest and similar charges (900,268,265) (767,917,726)
Income from securities transactions 40,947,124 56,369,658
Incomefromsharesandothervariable-yieldsecurities 39,983,98� ��,���,9�1
Incomefromparticipatinginterests - �9,289
Incomefromsharesinaffiliatedundertakings 18�,��9 ��,1�8
Sharesinaffiliatedundertakings
accountedforbytheequitymethod ���,��1 81�,2�0
Fee income (Note 29) 293,217,512 236,127,722
Fee expense (Note 29) (101,246,753) (72,748,667)
Net income on financial transactions (15,355,649) (17,747,822)
Other operating income (Note 30) 3,686,071 4,563,888
General administrative expenses (180,164,730) (153,715,500)
Personnelexpenses(Note3�) (12�,3�9,�30) (10�,309,���)
Ofwhich:
[Employeecompensation] [90,2��,�12] [��,���,2�3]
[Socialsecuritybenefitsandpayrolltaxes] [18,�13,112] [1�,330,290]
Ofwhich:
[Pension-relatedbenefitsandtaxes] [�,1��,�92] [3,��2,3�9]
Otheradministrativeexpenses (�2,�9�,100) (��,�0�,9��)
Value adjustments in respect of tangible and intangible asset (Note 5) (7,066,817) (7,364,549)
Goodwill amortization (Note 8) (12,353,041) (12,382,471)
Other operating charges (Note 31) (2,413,919) (1,665,592)
Value adjustments in respect of loans, advances and
provisions for contingent liabilities and commitments (14,812,970) (2,913,837)
Value re-adjustments in respect of loans, advances and
provisions for contingent liabilities and commitments 1,088,928 6,821,169
Theaccompanyingnotesareanintegralpartoftheseconsolidatedfinancialstatements.
Consolidated income statement at December 31, 2005 (in EUR)
ANNuALRepORT2005■SOCIeTeGeNeRALeBANk&TRuST �1
2005 2004
Value adjustments of securities recorded as financial fixed assets,
shares in affiliated undertakings (11,540) (151,868)
Net exceptional items - (1,604)
Exceptionalincome(Note33) - 23�
Exceptionallosses(Note33) - (1,8�0)
Tax on ordinary and exceptional income (Note 32) (28,955,822) (25,735,587)
Earnings before exceptional items after tax 146,972,121 148,508,559
Other taxes not included in the preceding items (Note 32) (1,285,450) (1,512,097)
Net income before minority interests 145,686,671 146,996,462
Netincome 13�,��8,2�� 138,3��,�0�
Minorityinterests 11,038,�2� 8,��1,0��
Theaccompanyingnotesareanintegralpartoftheseconsolidatedfinancialstatements.
ANNuALRepORT2005■SOCIeTeGeNeRALeBANk&TRuST�2
NoTE 1 – orGANIzATIoN
TheSociétéGénéraleBank&TrustS.A.Group(the“Group”)
preparesitsconsolidatedfinancialstatementsineuros,the
currencyofitssharecapital.Theconsolidatedfinancialstate
mentsarepreparedonthesamedateastheannualstatutory
financialstatementsofSociétéGénéraleBank&TrustS.A.
(the“Bank”),whichistheparentcompany.
In2005,theBankopenedabranchinSingapore,whichbe
ganitsoperationsonNovember4,2005furthertoatransfer
inkindoftheprivatebankingbusinessofSociétéGénéralein
Singapore.ThefinancialstatementsoftheBankatDecember
31,2005includethefinancialstatementsoftheSingapore
branch(the“Branch”).
AtDecember31,2005theGrouphadtwobankingsubsid
iaries:oneinSwitzerland,theotherinMonaco.TheSwiss
subsidiaryinturnhasbranchesinZurichandLausanneas
wellasasubsidiaryinLugano.
NoTE 2 – SIGNIFICANT ACCouNTING PrINCIPlES
2.1. General principles
TheconsolidatedfinancialstatementsoftheGrouphavebeen
drawnupinaccordancewiththeprovisionsoftheFinancial
SectorSupervisoryCommission(CommissiondeSurveillance
duSecteurFinancier−CSSF),andwithapplicablelaw(law
ofJune17,1992relatingtotheannualstatutoryfinancialsta
tementsandtheconsolidatedfinancialstatementsofbanks
governedbyLuxembourglaw)andregulations,aswellasin
accordancewiththegenerallyacceptedaccountingpractices
forthebankingsectorintheGrandDuchyofLuxembourg.
Thepresentationoftheconsolidatedfinancialstatements
atDecember31,2004hasbeenchangedtomakethem
comparable.
2.2. Consolidation principles
Theconsolidatedfinancialstatementsareestablishedon
thebasisofthefinancialstatementsoftheBankandofthe
LuxembourgandforeigncompaniesmakinguptheGroup,
afterrecognitionofminorityinterests.Sincethefinancialstate
mentsofforeignsubsidiariesarepreparedusingaccounting
principlesgenerallyacceptedintheirrespectivecountries,
anynecessaryrestatementsandadjustmentsaremadeprior
toconsolidationsothattheycomplywiththeaccountingprin
ciplesusedbytheGroup(Note2.3.).
a)Consolidationmethods
AllcompaniesincludedintheBank’sscopeofconsolidation
atDecember31,2005and2004,(Note3)andinwhichthe
Bankholdsmorethan50%ofthevotingrightsareconsoli
datedunderthefullconsolidationmethod.Balancesheet,
offbalancesheetand incomestatement itemsare fully
consolidatedwiththecorrespondingitemsoftheBank.All
intercompanybalancesheet,offbalancesheetandincome
statementtransactionsareeliminatedintheconsolidated
financialstatements.
Theequitymethodisappliedtointerestsincompanies,
otherthanthoseofapurelyfinancialnature,overwhichthe
Groupexercisessignificantinfluence,thatis,companiesin
whichtheGroupholdsbetween20%and50%ofthevoting
rights.
Notes to the consolidated financial statements at December 31, 2005 (in EUR)
ANNuALRepORT2005■SOCIeTeGeNeRALeBANk&TRuST �3
b)Treatmentofacquisitionsandgoodwill
Goodwillisthedifferencebetweenthepurchasepricepaidby
theBankforaconsolidatedsubsidiaryandtheshareofnet
assetsacquiredonthedateofthefirstconsolidation.
positivegoodwilliscarriedontheassetsideofthebalance
sheetundertheheading“Goodwill”andisamortizedaccord
ingtoapredefinedplanoverasetperiodbeginningonthe
dateoffirstconsolidationandaccordingtotheassumptions
usedandobjectivessetatthetimeoftheacquisition.The
goodwillrecognizedasofDecember31,2005and2004is
relatedtotheentitySGprivateBanking(Suisse)S.A.(Note
3).Goodwillisamortizedusingthestraightlinemethodover
aperiodoffifteenyearsinsteadoftheusualfiveyearsinorder
topresentafairpictureoftheBank’sresults.Thegoodwill
bookedontheacquisitionsofSociétéImmobilièredel’Arsenal
S.àr.l.andCoparerHoldingB.V.hasbeenclearlyidentified
anddirectlyrecordedunder“Tangiblefixedassets”asgains
ontherevaluationoftheirbuildings.Nogoodwillwasboo
kedforeuroVLLuxembourgS.A.,MontalisInvestmentB.V.,
SGBTeuropeanCitiusInvestmentS.A.andSGBTFinance
IrelandLtd,sincetheBank’sequityinterestsweretakenatthe
timethesecompanieswereformed.Moreover,nogoodwill
wasbookedforSGBTMonacoS.A.M.,sincethesharesinthe
latterweresoldin2005totheBankbySGprivateBanking
(Suisse)S.A.attheirnetbookvalue.
NegativegoodwillisrecordedontheLiabilitiessideofthe
consolidatedbalancesheetundertheheading“Negative
goodwill”.
c) Conversionofforeigncurrencyfinancialstatements
Balancesheetandoffbalancesheetitemsofconsoli
datedcompaniesreporting in foreigncurrenciesare
convertedintoeurosattheofficialexchangeratespre
vailingatyearend.
Incomestatementitemsofthesecompaniesaretranslated
intoeurosataverageexchangeratesfortheyear.
Differencesresultingfromtheuseoftwodifferentex
changeratestovalue,ontheonehand,theconsolidated
companies’balancesheetitemsand,ontheother,their
incomestatementitems,arerecordedunder“Conversion
differences”ontheassetssideofthebalancesheetwhen
theyarepositiveandontheliabilitiesandshareholders’
equitysidewhentheyarenegative.
Theexchangeratesusedfortranslatingbalancesheetand
offbalancesheetitemsofconsolidatedcompaniesreporting
inforeigncurrencieswereasfollows(atDecember31):
2005 2004
1EUR= 1.���1CHF 1.��29CHF
Theaverageexchangeratesusedfortranslatingincome
statementitemsofconsolidatedcompaniesreportingin
foreigncurrencieswereasfollows(atDecember31):
2005 2004
1EUR= 1.��82CHF 1.��2�3CHF
ANNuALRepORT2005■SOCIeTeGeNeRALeBANk&TRuST��
d)Deferredtaxes
Deferredtaxesarebookedwhenthereisasignificanttiming
differencebetweentherestatedbookvalueandthetaxvalue
ofconsolidatedcompanies’netincome(Note32).
2.3. Accounting principles and valuation methods
TheprincipalaccountingmethodsappliedbytheGroupare
asfollows:
a)Conversionofaccountsandtransactionsdenominated
inforeigncurrencies
TheBankanditsbankingsubsidiarieskeepaccountsin
severalcurrencies,whichinvolvesrecordingeachforeign
currencydenominatedtransactioninaseparateaccountfor
eachcurrency,expressedintermsofpositions.
Theconversionofaccountsdenominatedinforeigncurren
ciescomplieswiththefollowingcriteria:
Balancesheetitemsareconvertedintoeurosatthespot
exchangeratesprevailingatyearend.
lncomestatementitemsareconvertedintoeurosatthe
spotexchangeratesprevailingonthedateoftheirbooking
toincome.
unrealizedgainsandlossesonspotforeigncurrencypos
itionsarerecognizedintheincomestatement,exceptfor
thosearisingonforeignexchangetransactionshedgedvia
theuseofforwardforeignexchangecontracts.
Hedgedspotforeigncurrencypositionsareconsideredto
beneutralwithrespecttoexchangeratefluctuations.Their
conversionhasnoimpactonforeigncurrencygainsand
losses.
ThemainspotexchangeratesusedbytheGroupwereas
follows(atDecember31):
2005 2004
1EUR= 1.1�9�USD 1.3�21USD
1EUR= 1.3�2�CAD 1.��1�CAD
1EUR= 138.90JPY 139.��JPY
1EUR= 1.���1CHF 1.��29CHF
b)Amountsduefrombanksandtobanks,customerloans
anddeposits
Amountsdueondemandcompriseamountsthatcanbe
withdrawnatanytimewithoutnoticeoron24hours’notice.
Termdepositsandborrowingsincludeallamountswhose
residualdurationismorethan24hours.
Amountsduefrombanksandcustomerloansarerecorded
asassetsonthebalancesheetattheiracquisitionprice
lessanyadjustmentsforlossinvalueasdescribedinnote
2.3.g).Amountsduetobanksandcustomerdepositsare
recordedasliabilitiesonthebalancesheetattheirredemp
tionvalue.
Redemptionpremiumsanddiscountsresultingfromthedif
ferencebetweenthecontractualamountandtheredemp
tionamountareaccruedproratatemporisaseitherassets
orliabilitiesundertheheading“Accrualsandsimilar”.
ANNuALRepORT2005■SOCIeTeGeNeRALeBANk&TRuST ��
c)Securitiesportfolio
Bondsandotherfixedincomedebtsecurities(bonds),shares
andothervariableincomesecurities(shares),longtermin
vestmentsecuritiesandinvestmentsinnonconsolidated
subsidiariesandaffiliatesarevaluedinaccordancewiththeir
classificationintothecategoriesdescribedinpoints1),2)
and3)below.
Bondsarecarriedattheirpurchasepriceexcludingacquisition
expensesandinterestaccruedandnotyetdueatthedateof
purchase.Withoutprejudicetosecuritiesissuedatadiscount
(zerocouponbonds),accruedinterestreceivablesincethe
lastcoupondateorthedateofissueisrecordedasanasset
under“Accrualsandsimilar”untilthenextcoupondate.
Sharesarecarriedonthebalancesheetattheirpurchase
priceexcludingacquisitionexpenses.Incomefromthesese
curitiesisrecordedas“Dividendincome”whenpaid.
TheGroupusestheaverageweightedunitcostmethodfor
valuingitssecuritiesportfolio.
1)Tradingportfolio
Tradingsecuritiesaresecuritieswhichareacquiredwithaview
toresellingthemwithinamaximumperiodofsixmonths.
Atyearend,bondsarevaluedattheirmostrecentmarket
price.unrealizedgainsandlossesaretakentoincomeand
recordedunder“Netincomefromfinancialtransactions”.
equitysecuritiesarevaluedatthelowestofcostandrealiz
ablevalue,andinthecaseoflistedsecurities,themostrecent
priceatyearend.unrealizedcapitalgainsarenotrecognized
intheaccountsbutaprovisionfordepreciationofportfolio
securitiesisbookedtocoverunrealizedcapitallosses.
2)Shortterminvestmentportfolio
Shortterminvestmentsecuritiesarethoseintendedtobeheld
formorethansixmonths,exceptforthoseclassifiedaslong
terminvestmentsecurities.
Securitiesarevaluedatthelowestofcostandrealizablevalue,
andinthecaseoflistedsecurities,themostrecentpriceat
yearend.unrealizedcapitalgainsarenotrecognizedinthe
accountsbutaprovisionfordepreciationofportfoliosecurities
isbookedtocoverunrealizedcapitallosses.
Whenthepurchasepriceofthebondsintheshortterminvest
mentportfolioishigherthantheirredemptionprice,thepositive
differenceisproratedonastraightlinebasisinthe“Accruals
andsimilar”and“Interestandsimilarexpenses”accounts.
3)Longterminvestmentportfolio
Longterminvestmentsecuritiesincludelongtermequityin
vestmentsandinvestmentsinnonconsolidatedsubsidiaries
andaffiliates,withtheexceptionofequityinvestmentsthat
arenotdeemedusefultothebusinessoftheGroupoverthe
longterm.Longtermequityinvestmentsandinvestments
innonconsolidatedsubsidiariesandaffiliatesarerecorded
atcost.Aprovisionfordepreciationofportfoliosecuritiesis
bookedif,intheopinionoftheBoardofDirectors,thereisa
permanentlossofvalue.
Longterminvestmentsecuritiesincludebondsthatthe
Groupintendstoholduntilmaturity.Bondsinthelongterm
investmentportfolioarerecordedatcostprovidingthey
ANNuALRepORT2005■SOCIeTeGeNeRALeBANk&TRuST��
meettheregulatoryconditionsthatapplytothiscategory
ofsecuritiesinLuxembourg.Bondsinthiscategorylinked
toaninterestrateswapagreementarerecordedatcost
providingtheymeettheregulatoryconditionsthatapply
tothiscategoryofsecuritiesinLuxembourg.Whenthese
conditionscannotbemet,thebondsarerecordedfollowing
thesameprinciplesasthoseappliedtoshortterminvest
mentportfolio.
Noprovisionismadeatyearendforunrealizedlosseson
securitiescarriedatcost,exceptintheeventofpermanent
lossofvalue.
Whenthepurchasepriceofbondsinthelongterminvest
mentportfolioisdifferentfromtheirredemptionvalue,the
negative(orpositive)differenceisamortizedonastraightline
proratabasisunder“Accrualsandsimilar”and“Interestand
similarincome”(or“Interestandsimilarexpense”).
d)premises,equipmentandotherfixedassets
premises,equipmentandotherfixedassetsarecarriedattheir
purchaseprice.Assetswithalimitedusefullifearedepreciated
usingthestraightlinemethodovertheestimatedusefullifeof
theasset.
Thestraightlinedepreciationratesusedareasfollows:
Startupcosts: 2033.3%
Buildings: 4%
Technicalinstallations: 2033.3%
Otherinstallations,officefurnitureandequipment:1033.3%
Intheeventofpermanentlossofvalue,fixedassetsaresubject
toprovisionsforadditionaldepreciationtogivethemthelower
valuetoberecordedatyearend.Theseprovisionsmaybe
reversedifthereasonsforbookingthemceasetoexist.
e) Forwardfinancialinstruments
Commitmentsonforwardfinancialinstrumentsrelatingto
interestrates,currenciesorothermarketratesarerecorded
asoffbalancesheetitemsattheirnominalcontractvalueon
thetransactiondate.
Atyearend,aprovisionismadeforunrealizedcapitallos
sesresultingfromtheindividualvaluationatmarketpricesof
thetransactionsthathavenotbeensettled.Thisprovisionis
bookedasaliabilityunder“provisionsforgeneralrisksand
commitments–otherprovisions”.
Noprovisionismadewhenthefinancialinstrumentprecisely
coversanassetorliabilityitemandwheneconomicunityhas
beenestablished,norwhenthefinancialinstrumentishedged
byatransactionintheoppositedirectioneffectivelyclosing
theposition.Revenuesandexpensesonhedgingtransac
tionsarerecognizedintheincomestatementinthesame
mannerasrevenuesandexpensesonthehedgeditems.
f)provisionsforliabilitiesandcharges
Inadditiontotaxprovisionsandprovisionsforpensionsand
otherpostretirementbenefits,theseprovisionsnotablyin
cludeprovisionsforrisksonoffbalancesheettransactions,
provisionsfortheLuxembourgDepositGuaranteeAssocia
tion(AssociationpourlaGarantiedesDépôts,Luxembourgor
A.G.D.L.)andprovisionsforcontingenciesanddisputes.
TheBankisamemberofLuxembourg’sdepositguarantee
association(AssociationpourlaGarantiedesDépôts,Luxem
ANNuALRepORT2005■SOCIeTeGeNeRALeBANk&TRuST ��
bourgA.S.B.L.,orA.G.D.L),whosepurposeistoestablisha
systemformutuallyguaranteeingthecustomerdepositsof
creditinstitutionsthataremembersoftheassociation,regard
lessofnationalityorresidence.
Inaccordancewithitsbylaws,A.G.D.L.reimbursestodepos
itorstheamountoftheirguaranteeddepositsandtoinvestors
theamountoftheirguaranteedassets.Themaximumforsuch
guaranteeshasbeensetateuR20,000(oritsequivalent
inaforeigncurrency)percashdepositandateuR20,000
forassetsresultingfrominvestmenttransactionsotherthan
cashdeposits,regardlessofthenumberofaccountsthatthe
customerhasatthesamebank.
g)Valueadjustments
Valueadjustmentsonassetsincludeprovisionsfordoubtful
loans,valueadjustmentsofthesecuritiesportfolio,thelump
sumprovision,depreciationandamortizationofintangible
assetsandpropertyandequipment,andgoodwillonfirst
consolidation.Foragivenasset,negativevalueadjustments
aredeductedfromitsnominalvalueorcost,withtheasset
recordedatitsnetbookvalueonthebalancesheet.
InaccordancewithLuxembourglaw,theBankhasrecorded
ageneralprovisiontocoveritsassetsatrisk.
ThecircularissuedbytheLuxembourgtaxauthoritieson
December16,1997authorizedbankstomakeataxdeduct
iblegeneralprovisionbasedonallassetsandoffbalance
sheetitemsdeemedtobeatriskwithintheframeworkofthe
prudentialbankingrulesapplicabletothecapitaladequacy
ratio.Theapplicablerateis1.25%basedontheweighted
assetsandoffbalancesheetitemsatrisk.Theseassetsand
offbalancesheetitemsatriskcorrespondto12.5timesthe
shareholders’equityrequiredtocovercredit,commodity
pricevariations,foreignexchangeandmarketrisks.Market
risksincludetradingportfolioexposuresasdefinedbythe
rulesapplicabletothecapitaladequacyratio.
AtDecember31,2005,theLuxembourggeneralprovision
amountedtoeuR58,192,000(2004:euR46,339,295).
Thepartcorrespondingtocreditriskattributedtobalance
sheetitems,i.e.euR55,675,448(2004:euR44,081,541),
wasdeductedfromtheassetsonwhichitwascalculated.
Thebalanceoftheprovision,euR2,516,552(2004:euR
2,257,754),correspondingtocreditriskattributedtooffbal
ancesheetitemsandcommoditypricevariations,foreign
exchangeandmarketrisks,wasrecordedasaliabilityunder
“Otherprovisions”.
AtDecember31,2005,thegeneralprovisionofeuR877,612
(2004:euR884,552)onthebooksofSGprivateBanking
(Suisse)S.A.waseliminatedonconsolidation.
Aprovisionequaltotheentireamountofinterestaccrued
andnotyetdueaswellasunpaidinterestondoubtfulloans
ismadeinadditiontotheprovisionfordepreciationofthe
principalamountofdoubtfulloans.
TheGroupnolongerrecordsaccruedinterestandreverses
anyinterestalreadyprovidedforonloansforwhichinterest
paymentscanreasonablybedeemedunlikely.
ANNuALRepORT2005■SOCIeTeGeNeRALeBANk&TRuST�8
Company Country Group ownership interest
Parent company : SociétéGénéraleBank&TrustS.A. Luxembourg 100%
Full consolidation : Banks SociétéGénéraleBank&Trust(Monaco)S.A.M. PrincipalityofMonaco 100%SGPrivateBanking(Suisse)S.A.(Groupe) Switzerland ��.�2%
Financial companies Euro-VLLuxembourgS.A. Luxembourg ��%
Real estate companies SociétéImmobilièredel’ArsenalS.àr.l. Luxembourg 100%CoparerHoldingB.V. Netherlands 100%
Others MontalisInvestmentB.V. Netherlands 9�%SGBTFinanceIrelandLtd Ireland 100%SGBTEuropeanCitiusInvestmentS.A. Luxembourg 99.99%
Companies accounted for by the equity method Insurance companies SogelifeS.A. Luxembourg �9%
NoTE 3 – CoNSolIdATIoN SCoPE
TheconsolidationscopeincludedthefollowingcompaniesatDecember31,2005:
ANNuALRepORT2005■SOCIeTeGeNeRALeBANk&TRuST �9
SogelifeS.A.wasformedonJuly22,1996asaLuxembourg
limitedliabilitycompany(sociétéanonyme)forthepurposeof
sellinglifeinsuranceproductsandmanaginggrouppension
funds.
SGprivateBanking(Suisse)S.A.isaSwissbankwhichresul
tedfromthe2003mergerofCompagnieBancairedeGenève
S.A.andSGRüeggBankA.G.,andisprimarilyinvolvedin
privatebanking.
SociétéGénéraleBank&Trust(Monaco)S.A.M.isaMo
nacobasedbankinthebusinessofprivateBanking.until
December30,2005,SociétéGénéraleBank&Trust(Monaco)
S.A.M.waswhollyownedbySGprivateBanking(Suisse)
S.A..Onthatdate,theBankpurchasedallthesharesheld
bySGprivateBanking(Suisse)S.A..
euroVLLuxembourgS.A.wasformedonNovember29,
2002.Thepurposeofthiscompanyistoprovideadminis
trative,distribution,domiciliationandinvestmentproduct
designservices,bothdirectlyandindirectly,tomutualfund
companiesandpensionfunds.
CoparerHoldingB.V.andSociétéImmobilièredel’Arsenal
S.àr.l.arerealestatecompanies.
MontalisInvestmentB.V.,SGBTFinanceIrelandLtdand
SGBTeuropeanCitiusInvestmentS.A.arefinancialcom
panieswhosemainbusiness istoprovidefinancingto
companies.
ANNuALRepORT2005■SOCIeTeGeNeRALeBANk&TRuST�0
NoTE 4 – loANS ANd dEPoSITS
Thebreakdownbytermtomaturityofdepositsandloansduefrombankswasasfollows(atDecember31):
Thegeographicalbreakdownofloansanddepositsduefrombankswasasfollows(atDecember31,2005):
(in Eur) Gross amount % of total General
provision (1)
other provisions for
possible lossesNet amount
(1)Thegeneralprovisionhasbeenallocatedproportionatelytogrossamountslessotherprovisionsforpossibleerrors.
Eurozonecountries �,2�0,���,0�3 ��.03% (�,�0�,��2) - �,2��,1�2,�11
OtherEuropeanUnioncountries �89,��8,�3� 8.0�% (910,0��) - �88,��8,��8
OtherOECDcountries 923,029,9�� 9.�2% (��1,�23) - 922,2�8,�21
Non-OECDcountries 1,811,10�,�3� 18.�9% (1,�19,0�9) - 1,809,�8�,38�
9,794,261,966 100.00% (9,705,180) - 9,784,556,786
deposits and loans due from banks (in Eur) 2005 2004
Lessthanthreemonths 8,831,13�,�38 �,�80,3��,029
Fromthreemonthstooneyear ��2,�09,100 �3�,0��,823
Fromonetofiveyears 2�9,1�9,982 83,8�1,2��
Morethanfiveyears 21,8�0,1�� -
9,784,556,786 8,500,261,098
AtDecember31,2005,ageneralprovisionofeuR9,705,180
(2004:euR9,218,019),calculatedonaproratabasisbyterm
tomaturityandbasedonthecreditriskattributedtoloans
anddepositsduefrombanks,wasdeductedfromthisasset
account.
ANNuALRepORT2005■SOCIeTeGeNeRALeBANk&TRuST �1
Thebreakdownbytermtomaturityofcustomerloanswasasfollows(atDecember31):
Thegeographicbreakdownofcustomerloanswasasfollows(atDecember31,2005):
(in Eur) Gross amount % of total General
provision (1)
other provisions for
possible lossesNet amount
(1)Thegeneralprovisionhasbeenallocatedproportionatelytogrossamountslessotherallowancesforpossiblelosses.
Eurozonecountries �,3��,018,083 ��.19% (3�,8�3,012) (�,�98,9��) �,32�,���,09�
OtherEuropeanUnioncountries ��2,�81,0�� �.31% (1,�08,319) - ��1,1�2,�2�
OtherOECDcountries 1,1��,��1,�28 10.�1% (1,29�,�99) (1,0��,933) 1,1�2,318,�9�
Non-OECDcountries 1,9�0,�0�,3�2 1�.�9% (�,�1�,��8) (101,31�) 1,9��,888,28�
10,962,875,908 100.00% (42,173,878) (6,656,226) 10,914,045,804
Customers loans (in Eur) 2005 2004
Lessthanthreemonths �,3��,223,01� 3,�33,32�,322
Fromthreemonthstooneyear 2,2�2,��3,��� 1,381,232,�31
Fromonetofiveyears 2,313,9��,9�1 1,3��,��2,��3
Morethanfiveyears 2,001,301,3�2 8�0,�28,829
10,914,045,804 7,121,839,555
AtDecember31,2005,ageneralprovisionofeuR42,173,878
(2004:euR31,522,992),calculatedonaproratabasisby
termtomaturityandbasedonthecreditriskattributedto
customerloans,wasdeductedfromthisassetaccount.
ANNuALRepORT2005■SOCIeTeGeNeRALeBANk&TRuST�2
NoTE 5 – FIxEd ASSETS
Duringtheyear,thefollowingmovementsinfixedassetswererecorded:
(in Eur) Gross book value 2004
Premium/discount Acquisitions disposals Foreign exchange
gain/(loss)Net book
value 2005
Accumulated depre-ciation, amortization
and provisions
Net book value 2005
(1)Thenetbookvalueof“Bonds”notincludedinfixedassetsamountedtoeuR3,802,767,848atDecember31,2005(2004:euR3,336,474,147).
(2)ThenetbookvalueatDecember31,2005of“Investmentsinnonconsolidatedsubsidiariesandaffiliates”notheldforthelongtermamounted
toeuR1,302,832(2004:euR1,184,989)
Bonds (1) 1,428,010,546 (108,133,486) 1,097,361,687 (196,674,254) 685,799 2,221,250,292 (451,770) 2,220,798,522
Long-term equity interests 1,054,004 - 14,592,149 (96,297) (7,078) 15,542,778 (486,517) 15,056,261
Investments in non-consolidated subsidiaries and affiliates (2) 2,622,480 - - (51,850) 2,115 2,572,745 (13,121) 2,559,624
Intangible fixed assets 14,741,003 - 7,957,601 (1,300,476) (41,164) 21,356,964 (10,291,781) 11,065,183
Tangible fixed assets 78,230,529 - 7,702,578 (4,814,031) (184,352) 80,934,724 (48,390,710) 32,544,014Of which : a)Landandbuildings �0,129,�22 - - (3,2�3,0��) (�0,9��) 3�,�8�,�98 (1�,011,0��) 21,���,��3b)Technicalinstallations 1�,81�,�29 - 1,208,282 (3��,1�0) (�3,�09) 1�,�83,1�2 (1�,9�2,�23) 2,�10,�39c)Otherinstallations,officefurnitureandequipment 21,28�,��8 - �,�9�,29� (1,1�3,83�) (�9,8��) 2�,���,0�� (18,�0�,132) 8,1�8,932
Buildingsused foroperationshadanetbookvalueof
euR7,357,097(2004:euR8,057,442).
AtDecember31,2005intangiblefixedassetscomprised
primarilyeuR422,144instartupcosts(2003:euR416,332)
andeuR19,844,340incostsincurredfortheacquisition
andinstallationofsoftware(2004:euR14,324,671).Accu
mulateddepreciationandamortizationconsistedprimarilyof
euR332,855(2004:euR191,231)relatedtostartupcosts
andeuR9,893,948(2004:euR9,563,996)relatedtothe
acquisitionandinstallationofsoftware.Technicalinstalla
tionscompriseprimarilycomputerhardware.
ANNuALRepORT2005■SOCIeTeGeNeRALeBANk&TRuST �3
(in Eur) Gross book value 2004
Premium/discount Acquisitions disposals Foreign exchange
gain/(loss)Net book
value 2005
Accumulated depre-ciation, amortization
and provisions
Net book value 2005
(1)Thenetbookvalueof“Bonds”notincludedinfixedassetsamountedtoeuR3,802,767,848atDecember31,2005(2004:euR3,336,474,147).
(2)ThenetbookvalueatDecember31,2005of“Investmentsinnonconsolidatedsubsidiariesandaffiliates”notheldforthelongtermamounted
toeuR1,302,832(2004:euR1,184,989)
Bonds (1) 1,428,010,546 (108,133,486) 1,097,361,687 (196,674,254) 685,799 2,221,250,292 (451,770) 2,220,798,522
Long-term equity interests 1,054,004 - 14,592,149 (96,297) (7,078) 15,542,778 (486,517) 15,056,261
Investments in non-consolidated subsidiaries and affiliates (2) 2,622,480 - - (51,850) 2,115 2,572,745 (13,121) 2,559,624
Intangible fixed assets 14,741,003 - 7,957,601 (1,300,476) (41,164) 21,356,964 (10,291,781) 11,065,183
Tangible fixed assets 78,230,529 - 7,702,578 (4,814,031) (184,352) 80,934,724 (48,390,710) 32,544,014Of which : a)Landandbuildings �0,129,�22 - - (3,2�3,0��) (�0,9��) 3�,�8�,�98 (1�,011,0��) 21,���,��3b)Technicalinstallations 1�,81�,�29 - 1,208,282 (3��,1�0) (�3,�09) 1�,�83,1�2 (1�,9�2,�23) 2,�10,�39c)Otherinstallations,officefurnitureandequipment 21,28�,��8 - �,�9�,29� (1,1�3,83�) (�9,8��) 2�,���,0�� (18,�0�,132) 8,1�8,932
Noprovisionsforadditionalpermanentdepreciationwere
recordedin2004or2005.
AtDecember31,2005,ageneralprovisionintheamount
ofeuR368(2004:euR0)calculatedonthecreditriskper
tainingtoassetswasdeductedfrom“Longtermequityin
vestments”.
AtDecember31,2005,ageneralprovisionintheamountof
euR1,581(2004–euR1,722)wasdeductedfrom“Invest
mentsinnonconsolidatedsubsidiariesandaffiliates–held
forthelongterm”.
AtDecember31,2005,euR25,431(2004:euR31,844)were
deductedfrom“Tangiblefixedassets”andareincludedin
“Accumulateddepreciation,amortizationandprovisions”.
ANNuALRepORT2005■SOCIeTeGeNeRALeBANk&TRuST��
NoTE 6 – dEBT SECurITIES, oTHEr FIxEd-INCoME SECurITIES, SHArES ANd oTHEr vArIABlE-
yIEld SECurITIES
AtDecember31,thebreakdownbetweenlistedandunlistedsecuritieswasasfollows:
listed securities (in Eur) 2005 2004
Bonds �,023,���,3�0 �,���,291,�20
Sharesandothervariable-yieldsecurities 2��,112,231 2��,�2�,12�
6,277,678,601 5,019,716,544
unlisted securities (in Eur) 2005 2004
Sharesandothervariable-yieldsecurities 803,3��,2�1 ��,�0�,���
Participatinginterests 1�,0��,2�1 ��8,��8
Sharesinaffiliatedundertakings 3,8�2,��� 3,80�,���
822,283,958 81,869,970
AtDecember31,thebreakdownofbondsbytermtomaturitywasasfollows:
Bonds (in Eur) 2005 2004
Lessthanthreemonths �03,3�1,3�� 2�,��8,1�8
Fromthreemonthstooneyear 9�,���,�18 122,�23,098
Fromonetofiveyears 2,3�8,39�,�0� 2,�9�,039,008
Morethanfiveyears 3,1��,3�2,002 1,920,181,1��
6,023,566,370 4,764,291,420
AtDecember31,2005,investmentsinnonconsolidatedsub
sidiariesandaffiliatesnotincludedinfixedassetsamounted
toeuR1,317,720(2004:euR1,193,520)(seeNote5).AtDe
cember31,2005,ageneralprovisionofeuR14,888(2004:
euR8,531),calculatedbasedonthecreditriskattributedto
thecorrespondingassets,wasdeductedfrominvestments
innonconsolidatedsubsidiariesandaffiliatesnotincluded
infixedassets.
ANNuALRepORT2005■SOCIeTeGeNeRALeBANk&TRuST ��
AtDecember31,2005,thebreakdownofBondsbygeographicaloriginwasasfollows:
(in Eur) Gross amount % of total General provision (1)
other provisions for
possible lossesNet amount
(1)Thegeneralprovisionhasbeenallocatedproportionatelytogrossamountslessotherprovisionsforpossiblelosses.
Eurozonecountries �,�9�,2��,�21 92.8�% (�0�,0�2) (2��,2�1) �,�93,282,388
OtherEuropeanUnioncountries 100,8�8,000 1.��% - - 100,8�8,000
OtherOECDcountries 118,233,8�� 1.9�% (12,��8) - 118,221,21�
Non-OECDcountries 212,0�9,9�8 3.�2% (28,9��) (8��,23�) 211,18�,���
6,025,427,564 100.00% (748,687) (1,112,507) 6,023,566,370
(in Eur) Gross amount % of total General provision (1)
other provisions for
possible lossesNet amount
(1)Thegeneralprovisionhasbeenallocatedproportionatelytogrossamountslessotherprovisionsforpossiblelosses.
Eurozonecountries 9��,832,��1 92.28% (2,02�,9��) - 9��,80�,�8�
OtherEuropeanUnioncountries 80,2��,�2� �.��% (1��,��9) - 80,091,1��
OtherOECDcountries 1,�99,122 0.1�% - - 1,�99,122
Non-OECDcountries 82,�91 0.01% - - 82,�91
1,059,671,878 100.00% (2,194,406) - 1,057,477,472
AtDecember31,2005,thebreakdownofSharesbygeographicaloriginwasasfollows:
Accrueddiscountsandpremiumsonbonds inthe long
terminvestmentportfolioamountedtoeuR628,603and
euR5,827,810respectively,atDecember31,2005(2004:
euR587,828andeuR4,150,533,respectively).
AtDecember31,2005,ageneralprovisionofeuR748,687
(2004:euR108,785),calculatedbasedonthecreditriskattri
butedtothecorrespondingassets,wasdeductedfrom“Bonds
andotherfixedincomedebtsecurities–Listed”.Ageneral
provisionofeuR525,172(2004:euR1,988,665),calculated
basedonthecreditriskattributedtothecorrespondingassets,
wasdeductedfrom“Sharesandothervariableyieldsecurities
–Listed”.AsimilargeneralprovisionofeuR1,669,234(2004:
euR608,738)wasdeductedfrom“Sharesandothervariable
yieldsecurities–unlisted”,euR368(2004:euR0)wasdeducted
from“Longtermequityinvestments–unlisted”andeuR16,469
(2004:euR10,253)wasdeductedfrom“Investmentsinnon
consolidatedsubsidiariesandaffiliates–unlisted”.
ANNuALRepORT2005■SOCIeTeGeNeRALeBANk&TRuST��
TheGroupheldasinglelongtermequityinvestmentofmorethan20%atDecember31,2005,asbelow:
Company Group ownership interest Acquisition price
Group share of shareholders’ equity at
december 31, 2005
SogelifeS.A.,Luxembourg(accountedforbytheequitymethod) �9 �,123,3�0 �,�2�,�9�
InJuly2003theBankacquired67%ofthesharecapitalof
CompagnieBancairedeGenèveS.A.,aSwissbank,for
CHF324,557,380.Theacquiredcompany’sconsolidated
shareholders’equityatthetimeoftheacquisitionamountedto
CHF158,300,000.Thegoodwillonfirstconsolidationbeforefair
valueadjustmentsthereforeamountedtoCHF218,496,380.
partofthisgoodwill,CHF29,400,000,wasallocatedtoiden
tifiableitemsintheconsolidatedfinancialstatementsofthe
acquiredentity,notablyincluding“provisionsforgeneralrisks
andcommitments”and“provisionsforexceptionallossin
value”ofcomputerhardware.
Duringthesecondhalfof2003,CompagnieBancairede
GenèveS.A.absorbedSGRüeggBankA.G.whichhadpre
viouslybeenfullyacquiredbytheBankin1998.Giventhe
termsofthemerger,theBanksubsequentlyowned77.62%
ofthemergedentity,whichwasrenamedSGprivateBanking
(Suisse)S.A..Asacorollarytothismerger,22.38%ofthe
sharecapitaloftheabsorbedentitywasassignedtothemi
norityshareholdersinCompagnieBancairedeGenèveS.A..
In2004and2005,theinitialacquisitionpricewasmodified
inaccordancewiththecontractualterms.Thebalanceofthe
goodwillonfirstconsolidationthatcouldnotbeallocatedto
identifiableitemsamountedtoeuR154,424,311atDecember
31,2005,asbelow:
AtDecember31,2005,nonmaterialindividualpositionsmade
upatotalatcostofeuR18,918,717(2004:euR4,264,515)
inlongtermequityinvestmentsandinvestmentsinnon
consolidatedsubsidiariesandaffiliates.
NoTE 7 – PArTICIPATING INTErESTS, SHArES IN AFFIlIATEd uNdErTAKINGS ANd SHArES IN
AFFIlIATEd uNdErTAKINGS ACCouNTEd For By THE EQuITy METHod
NoTE 8 – GoodWIll
ANNuALRepORT2005■SOCIeTeGeNeRALeBANk&TRuST ��
Grossamount 18�,29�,�09
FairvalueadjustmentsatDecember31,200� (30,8�1,298)
Net amount 154,424,311
NoTE 9 – oTHEr ASSETS
Otherassetscanbebrokendownasfollows(atDecember31,2005and2004):
(in Eur) 2005 2004
Short-termreceivables 2�,8�8,021 �,�1�,92�
Pensionfundinvestments 1,133,�38 1,3�3,8��
Premiumsonoptionspurchased 29,9�2,319 2�,8��,82�
Preciousmetals ��,212 �1,2��
Other �,330,8�2 �,8�3,�3�
61,340,032 39,851,312
“premiumsonoptionspurchased”comprisesmainlysecuri
tiesrelatedoptionstransactedwithprivatecustomersorfor
thebank’sownaccount.
“Other”intheabovetableincludedeuR2,777,809atDe
cember31,2005(2004:euR3,142,370)inrecoverablewith
holdingtaxes.
AgeneralprovisionofeuR36,618,calculatedonthecredit
riskattributedthecorrespondingassets,wasdeductedfrom
otherassetsatDecember31,2005(2004:euR57,332).
Thisgrossamountincludesanetamountatthedateofthe
mergerofeuR7,955,350correspondingtothegoodwillre
latingtoSGRüeggBankA.G.,afterdeductingtheportion
correspondingtothe22.38%ofitssharecapitalsoldin2003
aspartofthemergertransaction.
AsindicatedinNote2.2.b),goodwillisamortizedoveraperiod
of15years.Ifgoodwillwereamortizedoverfiveyearsinstead
of15years,totalassetsatDecember31,2005wouldhave
beenlowerbyeuR61,776,507.Consolidatednetincomefor
theyearwouldalsohavebeenlowerbyeuR24,706,081.
ANNuALRepORT2005■SOCIeTeGeNeRALeBANk&TRuST�8
NoTE 10 – rEPurCHASE TrANSACTIoNS IN WHICH THE SAlE ANd rEPurCHASE ArE BINdING ANd
THE BANK IS THE BuyING PArTy
Thesetransactionswerenotenteredintowithnonconsolidatedsubsidiariesandaffiliatesandbreakdownasfollows:
(in Eur) 2005 2004
Transactionswithbanks 1,08�,���,8�3 2,081,032,9��
Transactionswithcustomers - 2�,0��,�18
NoTE 12 – lIABIlITIES
Thebreakdownbytermtomaturityofamountsduetobanksbreaksdownaspossible:
Amounts owed to credit institutions (in Eur) 2005 2004
Lessthanthreemonths 10,�12,83�,�99 9,113,99�,�01
Fromthreemonthstooneyear 1,19�,92�,��� ��,��8,9��
Fromonetofiveyears 2��,��2,�83 3�2,�92,�10
Morethanfiveyears �3,�23,8�� 23,9�0,8��
12,231,138,805 9,545,006,932
AtDecember31,2005,theGroupheldeuR1,990,534,195
(2004:euR1,951,305,929)inprimaryfinancialinstruments
belonging to the tradingportfolio. In2005, theGroup
carriedouttransactionsonbehalfofthetradingportfolio
withamaximumpositionofeuR2,299,383,384 (2004:
euR1,962,664,311).
NoTE 11 – PrIMAry FINANCIAl INSTruMENTS (FINANCIAl ASSETS)
ANNuALRepORT2005■SOCIeTeGeNeRALeBANk&TRuST �9
Thebreakdownbytermtomaturityofcustomerdepositswasasfollows:
Amounts owed to customers (in Eur) 2005 2004
Lessthanthreemonths 11,892,3�3,��� �,���,�38,��9
Fromthreemonthstooneyear ��0,3��,928 3�9,��9,�18
Fromonetofiveyears 30�,28�,113 89,0�0,912
Morethanfiveyears 10,���,��0 10,���,��0
12,680,573,048 8,236,514,629
Customerdepositsatlessthanthreemonthsincludedno demandsavingsdepositsatDecember31,2005(2004:
euR45,718).
(in Eur) due to banks % of total Customer deposits % of total
Eurozonecountries �,92�,83�,08� ��.82% �,���,��8,2�� 3�.13%
OtherEuropeanUnioncountries 893,�8�,389 �.31% 22�,�88,��� 1.�8%
OtherOECDcountries 1,08�,�90,13� 8.8�% �,��3,181,�00 3�.8�%
Non-OECDcountries 2,32�,92�,19� 19.00% 3,32�,8��,32� 2�.2�%
12,231,138,805 100.00% 12,680,573,048 100.00%
AtDecember31,2005,theBankrecordedsaleandrepur
chasetransactionsunderabindingsaleandrepurchaseagree
ment.AssetssoldbytheGrouptotaledeuR3,596,933,279
(2004: euR 3,355,967,913, including euR 27,065,518
transactedwithSociétéGénérale,paris).
NoTE 13 – rEPurCHASE TrANSACTIoNS IN WHICH THE SAlE ANd rEPurCHASE ArE BINdING ANd
THE BANK IS THE SEllING PArTy
ThegeographicalbreakdownofamountsduetobanksandcustomerdepositswasasfollowsatDecember31,2005:
ANNuALRepORT2005■SOCIeTeGeNeRALeBANk&TRuST�0
NoTE 14 – dEBTS EvIdENCEd By CErTIFICATES
ThebreakdownbytermtomaturityofsecuritizeddebtsecuritieswasasfollowsatDecember31,2005and2004:
(in Eur) 2005 2004
Lessthanthreemonths 20�,�3�,�2� 1��,03�,003
Fromthreemonthstooneyear 3�,80�,�21 23,82�,10�
Fromonetofiveyears ��,�1�,3�1 32,132,120
Morethanfiveyears ���,0��,�0� ��9,088,32�
1,076,901,401 979,084,554
NoTE 15 – oTHEr lIABIlITIES
OtherliabilitiesbrokedownasfollowsatDecember31,2005and2004:
(in Eur) 2005 2004
Short-termpayables �1,398,��3 3�,�9�,���
Preferentialpayables �,���,809 �,��9,328
Miscellaneouspayables 11,80�,330 11�,3�0,�8�
Premiumsonsoldoptions 20,1��,�1� 8,301,099
Other 1�,0�8,8�� 11,8�1,���
94,008,973 178,779,051
AtDecember31,2005and2004, “premiumsonsold
options”comprisedprimarilysecuritiesrelatedoptions
transactedwithprivatecustomersorfortheBank’sown
account.
ANNuALRepORT2005■SOCIeTeGeNeRALeBANk&TRuST �1
NoTE 17 – SuBordINATEd dEBT
TheBankcarriedfoursubordinateddebtsfromaffiliatedcompaniesatDecember31,2005,asfollows:
outstanding Currency Interest rate Maturity
20,000,000 EUR Euribor+0.�% October10,201�
��,22�,�08 EUR Euribor+0.8% December29,2010
�0,000,000 EUR Euribor+0.8% December29,201�
�0,000,000 CHF Libor�month+0.�% November28,2013
TheeuR76,224,508subordinateddebtmayberepaidearly
asfrom2006attheBank’srequestsubjecttothreemonths’
notice.Saidnoticemustbesenttothelenderandtothe
FinancialSectorSupervisoryCommission(Commissionde
SurveillanceduSecteurFinancierorCSSF).IftheCSSF
refusestherequest,thedebtmaynotberepaidearly.
NoearlyrepaymentoftheeuR50,000,000subordinated
debtispossiblebeforeDecember29,2010.Thebankhas
therighttoearlyrepaymentonrequestsubjecttogiving
threemonths’noticetothelenderandtotheCSSF,which
canvetoearlyrepayment.
NoTE 16 – oTHEr ProvISIoNS
OtherprovisionsmainlyincludedthefollowingatDecember31,
2005:
AprovisionforliabilitiesandchargesofeuR3,415,822
(2004: euR 3,954,321) l inked to the valuation of
interest rate swaps included in the tradingportfolio
(Note25),
ThebalanceofeuR2,516,552(2004:euR2,257,754)on
thegeneralprovisioncalculatedonthebasisofthecredit
riskattributedtooffbalancesheetitems,andcommodity
pricevariation,foreignexchangeandmarketrisk,
A provision for litigations of euR 5,309,810 (2004:
euR5,243,821),
TheA.G.D.L.provision(Note2.3.f)ofeuR2,727,111(2004:
euR2,079,211),
AprovisionofeuR1,200,000(2004:euR1,000,000)for
possiblefutureriskslinkedtotheactivityascustodian
andcentraladministratorformutualfundcompanies,in
accordancewithcircularno,2002/77fromtheFinancial
SectorSupervisoryCommission(CommissiondeSur
veillanceduSecteurFinancier—orCSSF),
AprovisionforcontingentliabilitiesofeuR179,410(2004:
euR0),
AprovisionofeuR5,144,363(2004:euR5,124,241)forthe
restructuringoftheSwissentity.
ANNuALRepORT2005■SOCIeTeGeNeRALeBANk&TRuST�2
Thefirsttwosubordinateddebtslistedintheabovetable
aresubjecttounconditionalsubordinationclauses.Their
repaymentonmaturityissubjecttoCSSFapproval.
TheCHF40,000,000subordinateddebtissuedbytheSwiss
entitymaynotberepaidearlyattherequestoftheborrower
exceptbygivingonemonth’snoticepriortothehalfyearly
maturitydate.Thisdebtissubjecttosubordinationclauses
inaccordancewithSwissregulations.
TheeuR20,000,000subordinateddebtissuedbytheMo
nacoentitystipulatesthatitwillberepaidonmaturityonOc
tober10,2006.Thisdebtcannotberepaidearlyexcepton
theinitiativeoftheborrowerandfurthertothepriorapproval
oftheGeneralSecretaryoftheBankingCommission.The
agreementincludessubordinationclausesinaccordance
withFrenchregulations.
OnMarch31,2005,asprovidedforintheagreement,the
GrouprepaidearlytheeuR30,489,802subordinateddebt
onitsbooksatDecember31,2004.
Interestexpenseonthesesubordinateddebtsamounted
toeuR4,167,405in2005(2004:euR4,826,753).
AtotalamountofeuR126,224,508wasclassifiedasadd
itionalshareholders’equityatDecember31,2005forthe
purposeofcalculatingthecapitaladequacyratio(2004:
euR156,714,310).
NoTE 18 – SPECIAl ITEMS WITH A rESErvE
QuoTA PorTIoN
InaccordancewithArticle54oftheincometaxlaw,theBank
hadareserveofeuR17,254,770atDecember31,2005(un
changedfrom2004),comprisingthecapitalgainonthe2002
saleofalongtermequityinterest.
NoTE 19 – FuNd For GENErAl BANKING rISKS
Forreasonsofprudencegiventhespecialrisksinherentto
theBank’sbankingoperations,theBankmaintaineditsgene
ralreserveforbankingrisksateuR2,250,601atDecember
31,2005unchangedfrom2004.Thesefundsarefullyand
immediatelyavailabletocoverfuturelossesunidentifiedatthe
timeoftheirconstitutionasareserve.Appropriationstothis
reservearemadefromnetincome.
NoTE 20 – SuBSCrIBEd CAPITAl ANd SHArE
PrEMIuM
a)Commonstock
OnMay4,2000,thegeneralshareholders’meetingdecided
toconvert,effectiveJanuary1,2001,thesharecapitalof
LuF7,200,090,459toeurosandincreaseittoeuR179,043,102.
ThiswasdonebyincorporatingpaidinreservesofeuR557,522.
AtDecember31,2001,thesubscribedsharecapitalamounted
toeuR179,043,102andwasmadeupof1,420,977registered
shareswithanominalvalueofeuR126each.
OnNovember13,2002,thespecialshareholders’meeting
decidedtoincreaseshareholders’equitybyeuR502,815,976,
initiallybyincreasingthesharecapitalbyeuR252,656,208
withacontributioninkindwiththecreationof2,005,208new
shares,andsubsequentlybyincorporatingpartoftheadd
itionalpaidincapital,euR247,343,670,intothesharecapital
withthecreationof1,963,045newshares.
ANNuALRepORT2005■SOCIeTeGeNeRALeBANk&TRuST �3
OnOctober6,2004,thespecialshareholders’meetingap
provedthecapitalincreaseviatheissueof2,507,019new
sharesplusadditionalpaidincapitalandacashpaymentfor
thecontributionbySogeparticipationS.A.totheBankofare
presentativeshareofthestockofSGStructuredFinanceIre
landLtd.TheresultingcapitalincreasewaseuR315,884,394,
theadditionalpaidincapitalwaseuR184,115,606andthe
cashpaymentwaseuR100,000.
TheallocationoftheeuR184,115,358inadditionalpaidin
capitalwasalsodecidedbythesamespecialshareholders’
meeting.
Asaresult,atDecember31,2005(unchangedfrom2004)
thepaidupcommonstockamountedtoeuR1,179,042,732
andwasmadeupof9,357,482shareswithanominalvalue
ofeuR126each.
b)Additionalpaidincapital
AdditionalpaidincapitalamountedtoeuR2,816,416at
December31,2005(unchangedfrom2004).
(in Eur) 2005 2004
Legalreserve 31,��0,�30 2�,���,�8�
Specialtaxreserve(Note32) �9,832,��� ��,�11,8��
Consolidationreserves 1,8��,0�� 1,210,�82
103,238,421 74,167,413
NoTE 21 – CoNSolIdATEd rESErvES
ConsolidatedreservesbrokedownasfollowsatDecember31:
InaccordancewithlegalrequirementsinLuxembourg,5%of
theBank’snetincomefortheyearmustbeallocatedtoalegal
reserve.Thisallocationisnolongerrequiredoncethereserve
reaches10%ofthesubscribedandpaidincommonstock.
Thelegalreservecannotbeusedfordividendpayments.
NoTE 22 – ForEIGN CurrENCy-dENoMINATEd ASSETS ANd lIABIlITIES
Thecorrespondingvalueineurosofforeigncurrencyde
nominatedassets amounted toeuR9,577,939,041at
December31,2005(2004:euR4,345,900,101),andthe
correspondingvalueineurosofforeigncurrencydenomi
natedliabilitiesamountedtoeuR11,824,631,956(2004:
euR6,552,169,492).
ANNuALRepORT2005■SOCIeTeGeNeRALeBANk&TRuST��
NoTE 24 – CoMMITMENTS
TheGrouphadenteredintothefollowingtypesoftransactionsfortheindicatedamountsatDecember31:
(in Eur) 2005 2004
Forwardpurchasesofassets 1�,�11,��0 -
Forwardsalesofassets 1�,�11,��0 -
Confirmedcredits,notdrawn 319,23�,3�2 2��,��8,88�
Amountscallableoninvestmentsinnon-consolidatedsubsidiariesandaffiliates 1,12�,��0 1,12�,��0
Settlementofcashtransactions 1,3�9,�0�,1�3 �9,92�,29�
1,712,888,375 295,498,730
AtDecember31,2005,theGrouphadenteredintoforward
transactionsbasedonforeignexchangerates,interestrates
andotherfinancialinstrumentsnotincludedinthetrading
portfolioassummarizedbelow.
NoTE 25 – dErIvATIvE FINANCIAl INSTruMENTS NoT INCludEd IN THE TrAdING PorTFolIo
NoTE 23 – CoNTINGENT lIABIlITIES
ContingentliabilitiesbrokedownasfollowsatDecember31:
(in Eur) 2005 2004
Guaranteesandotherdirectsubstitutesforcredit 8�,833,�92 ��,3�0,��8
Acceptances 1,019,0�� �8,29�
Documentarycredits 22,822,�8� 2,818,982
Counterguarantees 22�,��0,10� 180,�80,�22
339,235,544 257,738,569
ANNuALRepORT2005■SOCIeTeGeNeRALeBANk&TRuST ��
december 31, 2005 (in Eur) less than 3 months
From 3 months to 1 year
From 1 to 5 years
More than 5 years ToTAl
(*)Thesefinancialassetscorrespondtothenotionalvalueofforeigncurrenciesnotyetreceivedinthecaseofcurrencyinstruments,ortothenotionalvaluesusedasthebasisforcalculatinginterestaccruedbutnotyetreceivedinthecaseofinterestrateinstruments.
Interest rate instruments: 2,710,771,653 1,812,704,422 2,670,013,526 2,986,897,047 10,180,386,648
Interestratecontracts 2,�9�,��1,��3 1,�10,983,��� 2,��0,013,�2� 2,9��,08�,0�� 9,9�2,8�2,8�1
Options 11�,000,000 101,�20,��� - 10,813,000 22�,�33,���
Currency instruments: 14,659,455,434 5,404,933,832 1,236,872,631 100,296,686 21,401,558,583
Currencyfutures 11,93�,���,318 3,9�1,1��,�93 23�,�8�,892 - 1�,132,389,�03
Currencyswaps 91�,23�,��� �91,���,918 9�2,3�9,�9� 100,29�,�8� 2,��0,3�8,���
Options 880,201,3�� 9�2,299,�21 �8,83�,2�2 - 1,881,33�,009
Other 92�,���,30� - - - 92�,���,30�
Instruments based on title deeds: 178,120,863 162,558,784 180,962,535 5,034 521,647,216
Options 1�8,120,8�3 1�2,��8,�8� 180,9�2,�3� �,03� �21,���,21�
ToTAl 17,548,347,950 7,380,197,038 4,087,848,692 3,087,198,767 32,103,592,447
Overthecountertransactionsenteredintoforpurposesofhedgingfinancialliabilities(*)brokedownasfollowsatDecember31,2005:
december 31, 2005 (in Eur) less than 3 months
From 3 months to 1 year
From 1 to 5 years
More than 5 years ToTAl
(*)Thesefinancialliabilitiescorrespondtothenotionalvalueofforeigncurrenciesnotyetreceivedinthecaseofcurrencyinstruments,ortothenotionalvaluesusedasthebasisforcalculatinginterestaccruedbutnotyetreceivedinthecaseofinterestrateinstruments.
Interest rate instruments: 2,787,771,653 1,812,704,421 2,670,013,526 2,985,684,047 10,256,173,647Interestratecontracts 2,�9�,��1,��3 1,�10,983,��� 2,��0,013,�2� 2,9��,08�,0�� 9,9�2,8�2,8�1Options 192,000,000 101,�20,��� - 9,�00,000 303,320,���
Currency instruments: 14,697,018,359 5,388,063,669 1,225,739,235 100,000,000 21,410,821,263Currencyfutures 11,9�3,2�2,33� 3,9��,123,�9� 23�,�8�,��0 - 1�,1��,881,��3Currencyswaps 918,313,0�� �93,�3�,�29 9�1,�18,2�3 100,000,000 2,��3,3��,���Options 880,201,3�� 93�,303,��3 �8,83�,2�2 - 1,8��,3�0,331Other 92�,231,�13 - - - 92�,231,�13
Instruments based on title deeds: 178,120,863 162,558,784 100,705,713 5,034 441,390,394Options 1�8,120,8�3 1�2,��8,�8� 100,�0�,�13 �,03� ��1,390,39�
ToTAl 17,662,910,875 7,363,326,874 3,996,458,474 3,085,689,081 32,108,385,304
Overthecountertransactionsenteredintoforthepurposeofhedgingfinancialassets(*)brokedownasfollowsat
December31,2005:
ANNuALRepORT2005■SOCIeTeGeNeRALeBANk&TRuST��
Interestrateforwardcontractsenteredintoonorganizedmar
ketshadanotionalvalueofeuR519million,includingeuR
200millionreachingmaturityinthreemonths,euR269million
fromthreemonthstooneyearandeuR50millionin2007.
december 31, 2004 (in Eur) less than 3 months
From 3 months to 1 year
From 1 to 5 years
More than 5 years ToTAl
(*)Thesefinancialassetscorrespondtothenotionalvalueofforeigncurrenciesnotyetreceivedinthecaseofcurrencyinstruments,ortothenotionalvaluesusedasthebasisforcalculatinginterestaccruedbutnotyetreceivedinthecaseofinterestrateinstruments.
Interest rate instruments: 1,299,101,941 701,814,410 2,026,347,249 2,727,584,939 6,754,848,539
Interestratecontracts 1,198,���,��� �3�,��1,2�9 2,02�,3��,2�9 2,�1�,98�,939 �,��9,��1,011
Options 100,���,3�� 1��,3�3,1�1 - 9,�00,000 2��,�0�,�28
Currency instruments: 9,203,975,250 3,976,967,840 761,323,472 98,766,610 14,041,033,172Currencyfutures �,83�,�0�,122 2,�9�,902,883 8�,30�,��9 - 10,�21,913,���
Currencyswaps 3,083,��� ��3,���,��� �19,���,03� 98,���,�10 1,3��,9�1,�93
Options �0�,�1�,�03 �2�,�19,�82 ��,��2,��8 - 1,28�,�0�,��3
Other ��8,��1,1�2 - - - ��8,��1,1�2
Instruments based on title deeds: 159,484,795 262,473,551 141,962,515 - 563,920,861 Options 1�9,�8�,�9� 2�2,��3,��1 1�1,9�2,�1� - ��3,920,8�1
ToTAl 10,662,561,986 4,941,255,801 2,929,633,236 2,826,351,549 21,359,802,572
Overthecountertransactionsenteredintoforthepurposeofhedgingfinancialassets(*)brokedownasfollows(at
December31,2004):
AtDecember31,2004,theGrouphadenteredintoforwardtransactionsbasedonforeignexchangerates,interestratesand
otherfinancialinstrumentsassummarizedbelow.
ANNuALRepORT2005■SOCIeTeGeNeRALeBANk&TRuST ��
Overthecountertransactionsenteredintoforpurposesofhedgingfinancialliabilities(*)brokedownasfollows(at
December31,2004):
(in Eur) less than 3 months
From 3 months to 1 year
From 1 to 5 years
More than 5 years ToTAl
(*)Thesefinancialliabilitiescorrespondtothenotionalvalueofforeigncurrenciesnotyetreceivedinthecaseofcurrencyinstruments,ortothenotionalvaluesusedasthebasisforcalculatinginterestaccruedbutnotyetreceivedinthecaseofinterestrateinstruments.
Interest rate instruments : 1,299,101,941 701,814,410 2,026,347,249 2,727,584,939 6,754,848,539
Interestratecontracts 1,198,���,��� �3�,��1,2�9 2,02�,3��,2�9 2,�1�,98�,939 �,��9,��1,011
Options 100,���,3�� 1��,3�3,1�1 - 9,�00,000 2��,�0�,�28
Currency instruments: 9,277,568,176 4,021,529,100 783,045,312 100,000,000 14,182,142,588
Currencyfutures �,910,�2�,�11 2,�93,�8�,��0 8�,199,�0� - 10,�91,210,3�8
Currencyswaps 3,�80,3�9 �01,�2�,1�8 ��1,2�3,02� 100,000,000 1,���,3��,���
Options �0�,�1�,�03 �2�,�19,�82 ��,��2,��8 - 1,28�,�0�,��3
Other ��9,0��,883 - - - ��9,0��,883
Instruments based on title deeds: 143,117,437 226,388,097 51,142,762 - 420,648,296
Options 133,20�,2�0 22�,388,09� �1,1�2,��2 - �10,�3�,129
Other 9,911,1�� - - - 9,911,1��
ToTAl 10,719,787,554 4,949,731,607 2,860,535,323 2,827,584,939 21,357,639,423
Interestrateforwardcontractsenteredintoonorganized
marketshadanotionalvalueofeuR300million,including
euR150millionreachingmaturityfromthreemonthstoone
yearandeuR150millionin2006.
AtDecember31,2005and2004,theBankentersintoforwardcurrencyandcurrencyoptiontransactionsforthepurpose
ofhedgingtransactionsconcludedwithbankingcounterparties.Alltransactionsinitiatedbycustomersaresystematically
hedgedonthemarket.
ANNuALRepORT2005■SOCIeTeGeNeRALeBANk&TRuST�8
AtDecember31,2005,theGrouphadenteredintoforward
transactionsbasedonforeigninterestratesincludedinthe
tradingportfolioassummarizedbelow.
Tradingtransactionsonfinancialassetsandliabilitiesareen
teredintooverthecounter.
Inthefollowingtables,contractswithapositiveornegative
replacementvalueatDecember31areconsideredtobe,
respectively,financialassetsorfinancialliabilities.
BrEAKdoWN oF dErIvATIvE FINANCIAl INSTruMENTS IN THE TrAdING PorTFolIo AT dECEMBEr 31, 2005 (IN Eur)
ovEr-THE-CouNTEr less than three months From three months to one year From one to five years More than five years Total
Financial assets Notional value Fair value Notional value Fair value Notional value Fair value Notional value Fair value Notional value Fair value
ovEr-THE-CouNTEr less than three months From three months to one year From one to five years More than five years Total
Financial liabilities Notional value Fair value Notional value Fair value Notional value Fair value Notional value Fair value Notional value Fair value
Interest rate instruments 2,886,722,769 48,069,580 5,512,727,117 172,054,592 4,635,956,561 388,848,667 1,051,531,659 89,021,877 14,086,938,106 697,994,716
ToTAl 2,886,722,769 48,069,580 5,512,727,117 172,054,592 4,635,956,561 388,848,667 1,051,531,659 89,021,877 14,086,938,106 697,994,716
Interest rate instruments 10,067,579,602 105,240,415 6,624,145,658 191,717,365 3,625,880,424 258,355,505 1,061,531,659 90,820,764 21,379,137,343 646,134,049
ToTAl 10,067,579,602 105,240,415 6,624,145,658 191,717,365 3,625,880,424 258,355,505 1,061,531,659 90,820,764 21,379,137,343 646,134,049
BrEAKdoWN oF dErIvATIvE FINANCIAl INSTruMENTS IN THE TrAdING PorTFolIo AT dECEMBEr 31, 2004 (IN Eur)
ovEr-THE-CouNTEr less than three months From three months to one year From one to five years More than five years Total
Financial assets Notional value Fair value Notional value Fair value Notional value Fair value Notional value Fair value Notional value Fair value
ovEr-THE-CouNTEr less than three months From three months to one year From one to five years More than five years Total
Financial liabilities Notional value Fair value Notional value Fair value Notional value Fair value Notional value Fair value Notional value Fair value
Interest rate instruments 3,486,829,497 1,276,934 3,376,031,511 11,656,277 1,439,761,459 11,490,226 33,000,059 2 8,335,622,526 24,423,439
ToTAl 3,486,829,497 1,276,934 3,376,031,511 11,656,277 1,439,761,459 11,490,226 33,000,059 2 8,335,622,526 24,423,439
Interest rate instruments 4,871,476,399 1,408,377 3,553,054,499 12,689,716 1,552,389,396 11,215,115 33,000,059 2 10,009,920,353 25,313,210
ToTAl 4,871,476,399 1,408,377 3,553,054,499 12,689,716 1,552,389,396 11,215,115 33,000,059 2 10,009,920,353 25,313,210
NoTE 26 – dErIvATIvES INCludEd IN THE TrAdING PorTFolIo
ANNuALRepORT2005■SOCIeTeGeNeRALeBANk&TRuST �9
AtDecember31,2005,interestraterelatedtransactionsin
cludedalargeportfolioofinterestrateswapsenteredintoby
theGroupwithintheframeworkofitsdynamicmanagement
ofitstransformationpositionor,ofitstradinginshortdated
securitiesclassifiedinthetradingportfolioforthetotalamount
ofeuR35,466,075,449(2004:euR18,345,542,879).This
portfolioofinterestratesswapsisclassifiedinthetrading
portfolioandnotablyincludestransactionsorthesaleand
purchaseofinterestrateswapsbasedonsimilarperiodsand/
orcurrencies.Theirvaluationattheprevailinginterestratesat
theendofyearresultsinanunrealizedlossofeuR3,415,822
(2004:euR3,954,321)whichwasrecordedunder“Otherpro
visions“(Note16).
BrEAKdoWN oF dErIvATIvE FINANCIAl INSTruMENTS IN THE TrAdING PorTFolIo AT dECEMBEr 31, 2005 (IN Eur)
ovEr-THE-CouNTEr less than three months From three months to one year From one to five years More than five years Total
Financial assets Notional value Fair value Notional value Fair value Notional value Fair value Notional value Fair value Notional value Fair value
ovEr-THE-CouNTEr less than three months From three months to one year From one to five years More than five years Total
Financial liabilities Notional value Fair value Notional value Fair value Notional value Fair value Notional value Fair value Notional value Fair value
Interest rate instruments 2,886,722,769 48,069,580 5,512,727,117 172,054,592 4,635,956,561 388,848,667 1,051,531,659 89,021,877 14,086,938,106 697,994,716
ToTAl 2,886,722,769 48,069,580 5,512,727,117 172,054,592 4,635,956,561 388,848,667 1,051,531,659 89,021,877 14,086,938,106 697,994,716
Interest rate instruments 10,067,579,602 105,240,415 6,624,145,658 191,717,365 3,625,880,424 258,355,505 1,061,531,659 90,820,764 21,379,137,343 646,134,049
ToTAl 10,067,579,602 105,240,415 6,624,145,658 191,717,365 3,625,880,424 258,355,505 1,061,531,659 90,820,764 21,379,137,343 646,134,049
BrEAKdoWN oF dErIvATIvE FINANCIAl INSTruMENTS IN THE TrAdING PorTFolIo AT dECEMBEr 31, 2004 (IN Eur)
ovEr-THE-CouNTEr less than three months From three months to one year From one to five years More than five years Total
Financial assets Notional value Fair value Notional value Fair value Notional value Fair value Notional value Fair value Notional value Fair value
ovEr-THE-CouNTEr less than three months From three months to one year From one to five years More than five years Total
Financial liabilities Notional value Fair value Notional value Fair value Notional value Fair value Notional value Fair value Notional value Fair value
Interest rate instruments 3,486,829,497 1,276,934 3,376,031,511 11,656,277 1,439,761,459 11,490,226 33,000,059 2 8,335,622,526 24,423,439
ToTAl 3,486,829,497 1,276,934 3,376,031,511 11,656,277 1,439,761,459 11,490,226 33,000,059 2 8,335,622,526 24,423,439
Interest rate instruments 4,871,476,399 1,408,377 3,553,054,499 12,689,716 1,552,389,396 11,215,115 33,000,059 2 10,009,920,353 25,313,210
ToTAl 4,871,476,399 1,408,377 3,553,054,499 12,689,716 1,552,389,396 11,215,115 33,000,059 2 10,009,920,353 25,313,210
ANNuALRepORT2005■SOCIeTeGeNeRALeBANk&TRuST�0
Thecreditriskrelatingtoderivativeinstrumentsnottraded
onthestockmarket,atDecember31,2005and2004,is
detailedinthefollowingtablewhoseheadingsaredefined
asfollows:
Notionalamountscorrespondtotheamountsrecordedfor
eachcontractenteredintowithathirdparty.Inthecase
ofexchangeratecontracts,thetableincludesonlythose
thathavenotmaturedwithin15daysofyearend.
Replacementvaluesarecalculatedusingamethodbased
ontheassumptionthatsincetheprimarymarketissuf
ficientlyliquid,itispossibleatalltimestofindaproduct
identicaltotheonethatisbeingvalued.Thiswouldthen
makeitpossibleto“turn”thetransaction,i.e.toenterintoa
symmetricaltransaction.Thedifferencesinthecashflows
generatedbythetwocontracts(realandfictitious)aredis
countedtopresentvalueatmarketrates.Onlythecurrent
replacementvaluesofthecontractsthathaveapositive
valueareincludedinthetable.Acontractissaidtohave
apositivevalueif,whenvaluedatcurrentmarketrates,it
generatesareplacementvalue.
potentialfuturereplacementvaluesarecalculatedbymul
tiplyingthenotionalamountsbyaconversionfactorthat
variesasafunctionofboththenatureofthecontractsand
theirtermtomaturity.TheCSSFdefinedtheconversion
factorsusedinthetable.
Netexposuretoriskisthesumofcurrentandpotential
futurereplacementvalues.Noguaranteeshavebeende
ductedsincetheBankhasnospecificthirdpartyguaran
teesonthesecontractsalthoughitisoftenprotectedby
masteragreements.
Thefollowingtablesdonottakeintoaccounttransactions
wheretheweightingattributedtothecounterpartyorthe
guarantorisnil.
NoTE 27 – CrEdIT rISK oN dErIvATIvE INSTruMENTS NoT TrAdEd oN THE SToCK MArKET
ANNuALRepORT2005■SOCIeTeGeNeRALeBANk&TRuST �1
december 31, 2005 (in Eur) Notional amount replacement value
Potential future replacement
values
Net exposure to risk
Interest rate contracts – Banks
<1year Eurozone 1�,009,�2�,19� 3�,09�,10� - 3�,09�,10�
Canada 1�9,�3�,�2� 2,�21,10� - 2,�21,10�
UnitedKingdom 12,��3,31�,23� 2�,���,128 - 2�,���,128
UnitedStates 1,��8,193,��0 �,�12,�13 - �,�12,�13
Switzerland 2�,�21,819 32,1�1 - 32,1�1
Other �2,383,��� 12�,822 - 12�,822
29,398,778,173 66,643,034 - 66,643,034
1-�years Eurozone 3,�33,18�,�9� 31,0�1,289 1�,���,933 �8,�0�,222
Canada �2,383,��� ��1,3�� 211,918 ��3,2��
UnitedKingdom �,�39,032,122 2�,���,��� 28,�9�,1�1 �3,��0,81�
UnitedStates �13,1��,892 3,139,192 3,0��,82� �,20�,01�
9,927,767,367 59,487,482 49,638,836 109,126,318
>�years Eurozone 2,�1�,�3�,299 �1,�2�,��� 39,23�,��9 80,��0,22�
UnitedStates 1�,�3�,382 - 2��,��� 2��,���
UnitedKingdom �8�,���,�3� 8��,2�1 10,311,9�� 11,1�9,218
3,319,538,116 42,382,917 49,793,072 92,175,989
ToTAl 42,646,083,656 168,513,433 99,431,908 267,945,341
Currency contracts – Banks
<1year Eurozone 3,3�9,208,�8� 21,38�,�29 33,�92,088 ��,0�8,�1�
Switzerland 2,�22,���,�2� 10,321,18� 2�,22�,��� 3�,��8,8�0
Canada �8,912,�0� 3,9�2,212 �89,12� �,��1,338
UnitedKingdom 2,�39,��3,��� �1,089,108 2�,39�,�3� 88,�8�,���
Japan �0,81�,000 - �08,1�0 �08,1�0
UnitedStates ��0,830,�2� 9,1�9,80� �,�08,30� 1�,��8,113
Other 1,�93,�8�,�89 12,1�2,322 1�,93�,8�� 28,108,199
11,095,884,907 118,101,162 110,958,849 229,060,011
1-�years Eurozone 289,9�1,22� 3,�99,09� 1�,�98,��1 18,19�,���
UnitedKingdom �1�,3�1,003 8,���,3�0 3�,8�8,��0 ��,�1�,910
Switzerland �8,9�1,188 38,�38 2,9�8,0�9 2,98�,�9�
1,066,303,417 12,383,894 53,315,170 65,699,064
>�years Eurozone 100,296,686 172,134 7,522,251 7,694,385
ToTAl 12,262,485,010 130,657,190 171,796,270 302,453,460
ANNuALRepORT2005■SOCIeTeGeNeRALeBANk&TRuST�2
december 31, 2005 (in Eur) Notional amount replacement value
Potential future replacement
values
Net exposure to risk
Interest rate contracts – Customers
>1year Eurozone 1�,000,000 - - -
Switzerland 32,1�2,2�3 - - -
49,152,273 - - -
1-�years Eurozone 10,2��,8�� - �1,28� �1,28�
Other 99�,000,000 20,8�1,39� �,9��,000 2�,83�,39�
1,005,256,845 20,861,394 5,026,284 25,887,678
>�years Eurozone 33�,��3,2�2 - �,033,�99 �,033,�99
Other 2,119,183 - 31,�88 31,�88
337,692,435 - 5,065,387 5,065,387
ToTAl 1,392,101,553 20,861,394 10,091,671 30,953,065
Currency contracts – Customers
<1year Eurozone 2,�8�,�81,200 3�,8�8,�8� 2�,8��,812 ��,�2�,�98
UnitedKingdom 3�,1�8,3�0 �,��� 3�1,�8� 3��,1�9
Switzerland 8,�8�,�88 - 8�,8�� 8�,8��
Japan ��,33�,�0� - ��3,3�� ��3,3��
Other 8��,�82,2�� �,988,2�2 8,���,822 13,���,08�
3,648,432,179 42,862,613 36,484,322 79,346,935
1-�years Eurozone 119,626,032 2,840,548 5,981,302 8,821,850
ToTAl 3,768,058,211 45,703,161 42,465,624 88,168,785
ANNuALRepORT2005■SOCIeTeGeNeRALeBANk&TRuST �3
december 31, 2004 (in Eur) Notional amount replacement value
Potential future replacement
values
Net exposure to risk
Interest rate contracts – Banks
<1year Eurozone 8,���,�98,980 18,11�,031 - 18,11�,031
Canada 10�,3��,�3� 81�,213 - 81�,213
UnitedKingdom �,222,22�,8�� 1�,��8,8�0 - 1�,��8,8�0
UnitedStates 882,2��,3�3 �,0��,218 - �,0��,218
Switzerland 1��,832,09� - - -
17,022,500,728 39,744,322 - 39,744,322
1-�years Eurozone 2,�9�,01�,9�1 21,322,�8� 12,9��,080 3�,29�,���
UnitedKingdom 2,1�9,9��,1�1 1�,131,1�� 10,899,881 2�,031,028
UnitedStates 19�,099,�81 2��,99� 9�0,�9� 1,218,�91
4,969,091,593 35,701,827 24,845,458 60,547,285
>�years Eurozone 2,2�9,309,213 3�,�80,9�2 33,�39,�38 �9,220,�90
UnitedKingdom �01,���,�83 101,�9� �,�2�,13� �,�2�,83�
2,750,984,996 35,582,649 41,264,775 76,847,424
ToTAl 24,742,577,317 111,028,798 66,110,233 177,139,031
Currency contracts – Banks
<1year Eurozone 2,3�3,���,393 �1,���,�18 23,�3�,��� 9�,113,2�2
Switzerland 82�,2�3,��� 18,9��,��� 8,2�2,�3� 2�,239,1�9
Canada 2�0,399,�39 �,�91,3�� 2,�03,99� 9,99�,339
UnitedKingdom 3,28�,01�,219 111,�0�,�90 32,8�0,1�2 1��,���,�32
Japan 21,�82,2�� 381,�80 21�,823 �9�,�03
UnitedStates 120,3��,3�1 13,�3�,12� 1,203,��� 1�,839,��9
Other 1,0�3,9��,��3 11,8��,�2� 10,�39,��� 22,�0�,202
7,922,146,877 235,524,527 79,221,469 314,745,996
1-�years Eurozone ���,8�9,�30 2��,�9� 2�,8�3,9�� 28,091,��2
UnitedKingdom �2�,913,0�2 1,2��,�8� 31,29�,��3 32,��1,139
1,182,792,592 1,503,081 59,139,630 60,642,711
>�years Eurozone 98,766,610 - 7,407,496 7,407,496
ToTAl 9,203,706,079 237,027,608 145,768,595 382,796,203
ANNuALRepORT2005■SOCIeTeGeNeRALeBANk&TRuST��
december 31, 2004 (in Eur) Notional amount replacement value
Potential future replacement
values
Net exposure to risk
Interest rate contracts – Customers
1-�years Eurozone 1�,000,000 8�,000 - 8�,000
Switzerland 32,�0�,�0� 1�2,033 - 1�2,033
49,406,507 247,033 - 247,033
>�years Eurozone 33,000,059 - 495,001 495,001
ToTAl 82,406,566 247,033 495,001 742,034
Currency contracts – Customers
<1year Eurozone 1,99�,239,9�2 �,0�0,3�9 19,9�2,�00 2�,022,��9
UnitedKingdom 2�,189,3�1 98�,129 2�1,89� 1,22�,023
2,020,429,323 5,045,478 20,204,294 25,249,772
1-�years Eurozone 50,340,893 - 2,517,045 2,517,045
ToTAl 2,070,770,216 5,045,478 22,721,339 27,766,817
ANNuALRepORT2005■SOCIeTeGeNeRALeBANk&TRuST ��
NoTE 28 – FIduCIAry oPErATIoNS
Totalassetsandliabilitiesarisingonfiduciaryoperations
outsidetheGroupnotincludedinthecorrespondingoff
balancesheetaccountseachamountedtoeuR768,084,358
atDecember31,2005(2004:euR873,319,706).
NoTE 29 – MANAGEMENT ANd rEPrESENTATIoN
SErvICES
AtDecember31,2005and2004,Feeincomeandexpense
relateprimarilytotheprovisionofmanagementandrepresen
tationservices.TheGroupprovidesitscustomerswiththese
servicesinthefollowingareas:
Wealthmanagement
Investmentadvice
Securitiescustodyandadministration
Centraladministrationrelativetoinvestmentfunds
Safedepositboxrentals
Fiduciaryrepresentation
Agencyfunctions.
NoTE 30 – oTHEr oPErATING INCoME
AtDecember31,2004andDecember31,2005,otherope
ratingincomecomprisedahostofnonmaterialbalances
resultingfromtheGroup’snormaloperationsandthereversal
ofprovisionssetasidefordisputes.AtDecember31,2004,
otheroperatingincomealsoincludedthereversalofaprovi
sionforfuturerisksrelatingtothemutualfundcustodianbank
activity,pursuanttoCSSFCircular2002/77(Note16).
NoTE 31 – oTHEr oPErATING CHArGES
Forboth2005and2004,otheroperatingchargescomprised
provisionsformiscellaneousdisputesrelatingtocustomer
claimsandotherprovisionsforgeneralrisksandcommitments
(Note16).For2005,otheroperatingchargesalsoincludedan
allocationtoprovisionsfortheA.G.D.L.(Note16).
NoTE 32 – INCoME TAx
TheBankissubjecttoalltaxesthatapplytoLuxembourg
banks.FinaltaxassessmentshavebeenmadeontheBank
upto1998.TheSingaporebranchissubjecttothetaxesthat
applyinSingapore.
In2005,thewealthtaxduefromtheBankfortheyearended
wasreducedbyeuR7,841,035(2004:euR4,484,180).Inorder
toqualifyforthetaxreductionsin2005and2004,theBank
committedtocreating,andthenmaintainingforfiveyears,a
specialreserveforwealthtaxreductionequaltofivetimesthe
amountofthereduction.Ifpartofthisreserveisusedbefore
theendofthefiveyearperiod,theBank’swealthtaxcharge
forthatyearwillbeincreasedby20%oftheamountused.
TheBank’sSwissentitiesaresubjecttoallSwisstaxeson
banks,inaccordancewiththetaxtreatybetweenSwitzerland
andLuxembourg.
Thecompaniesincludedintheconsolidationscopearesub
jecttothetaxesapplicableinthecountriesinwhichtheyare
based(Note3).
TheGroupbookeddeferredtaxesintheyearsendedDecem
ber31,2005and2004.
ANNuALRepORT2005■SOCIeTeGeNeRALeBANk&TRuST��
NoTE 33 – ExCEPTIoNAl INCoME ANd loSSES
NetexceptionalitemsfortheyearendedDecember31,2004
werenotmaterial.
BAlANCE SHEET ITEMS ASSETS (in Eur) 2005 2004
loans and advances to credit institutions 6,931,876,042 5,174,016,513Demanddeposits ��9,000,10� 2��,8�3,1�0Otherreceivables �,��2,8��,93� �,898,1�3,3�3
loans and advances to customers 6,306,486,493 4,551,682,107
debt securities and other fixed-income securities 103,071,705 3,188,528
Shares in affiliated undertakings 3,890,465 3,816,000
ToTAl 13,345,324,705 9,732,703,148
NoTE 34 – AFFIlIATEd CoMPANIES
Consolidatedbalancesheetandoffbalanceitemsincludedthefollowingtransactionswithaffiliatedcompanies(atDecember31,
grossamountsbeforegeneralprovisions):
ANNuALRepORT2005■SOCIeTeGeNeRALeBANk&TRuST ��
BAlANCE SHEET ITEMS lIABIlITIES (in Eur) 2005 2004
Amounts owed to credit institutions 8,647,485,331 6,363,213,420Demanddeposits ��2,�10,880 ��2,01�,��9Termdepositsandsubjecttonotice �,88�,9��,��1 �,801,19�,��1
Amounts owed to customers 473,901,195 62,399,554Otherdeposits– Demanddeposits 21,���,�3� 18,09�,901Termdepositsandsubjecttonotice ��2,2��,��0 ��,302,��3
Debts evidenced by certificates 138,824,291 208,007,570
Subordinated debt 171,946,327 182,639,516
ToTAl 9,432,157,144 6,816,260,060
oFF-BAlANCE SHEET ITEMS (in Eur) 2005 2004
Contingent liabilities 67,069,304 19,426,678
Commitments 608,745,325 26,972,457
Foreign currency-related transactions: 2,244,343,812 1,111,864,771Forwardforeignexchangetransactions 1,29�,���,198 �00,��1,208Crosscurrencyinterestrateswaps �88,�00,�9� 8�,0��,��0Options–OTC ��2,��9,9�� 320,222,2��Other 1�,�99,0�2 �,1��,���
Interest rate-related transactions: 9,061,678,585 3,653,461,057Interestrateswaps 9,0�0,8��,�8� 3,�8�,103,12�Options–OTC 10,813,000 ��,3��,930
Other market-related transactions: 128,459,719 155,939,054Variable-incomesecurities–Options–OTC 128,��9,�19 1��,939,0��
Fiduciary operations 404,971,796 374,970,700
ToTAl 12,515,268,541 5,342,634,717
ANNuALRepORT2005■SOCIeTeGeNeRALeBANk&TRuST�8
NoTE 35 – PErSoNNEl
TheGrouphadanaverageof1,272employeesin2005,com
paredwith1,028in2004.personnelbrokedownintothe
followingcategories(atDecember31):
Category
Number
2005 2004
Generalmanagement 9 �
Executives 3�0 288
Otheremployees 903 �3�
TotalcompensationpaidtoGeneralManagementinres
pectoftheyearendedDecember31,2005amountedto
euR1,684,605(2004:euR1,211,729).
Nopensioncommitmentsweremadetoformermembersof
GeneralManagementineither2005or2004.
AtDecember31,2005,therewerenomortgageloansto
membersofManagement(2004:euR150,000).
NoTE 36 – lArGEST SHArEHoldEr oF THE
PArENT CoMPANy
SociétéGénérale,whoseheadofficeislocatedat29,bou
levardHaussmann,75009paris,France,andwhichwas
thelargestgroupofcompaniesofwhichtheGroupwasa
subsidiary,consolidatedthefinancialstatementsofallGroup
companies,withtheexceptionofCoparerHoldingB.V.,for
theyearsendedDecember31,2005and2004.
Sogeparticipations,whoseheadofficeislocatedat29,bou
levardHaussmann,75009paris,France,consolidatedthe
financialstatementsoftheBankfortheyearsendedDecem
ber31,2005and2004.Sogeparticipationswasthesmallest
groupofcompaniesofwhichtheBankwasasubsidiaryand
wasitselfasubsidiaryofthelargestgroupofcompaniesmen
tionedabove.
Theconsolidatedfinancialstatementsmentionedaboveare
availableattheheadofficesoftheindicatedcompanies.
NoTE 37 – NoN-CoNSolIdATEd CoMPANIES
InaccordancewithArticle83ofthelawofJune17,1992,as
amended,relatingtotheannualandconsolidatedfinancial
statementsofLuxembourgbanks,certaincompanieshave
notbeenincludedintheconsolidationscopeduetotheir
negligiblesizewithrespecttopresentingafairpictureofthe
annualconsolidatedfinancialstatements.
le pin
April2004
CarolineDujardin
■ Abridged version of the parent company financial statements
ANNuALRepORT2005■SOCIeTeGeNeRALeBANk&TRuST 83
TotheBoardofDirectorsofSociétéGénéraleBank&TrustS.A.
FollowingourappointmentbytheBoardofDirectors,wehaveauditedtheaccompanyingfinancialstatements
ofSociétéGénéraleBank&TrustS.A.fortheyearendedDecember31,2005andhavereadtherelatedman
agementreport.ThefinancialstatementsandmanagementreportaretheresponsibilityoftheBoardofDirectors.
Ourresponsibilityistoexpressanopiniononthesefinancialstatementsbasedonourauditandtocheckthatthe
managementreportisconsistentwiththem.
WeconductedourauditinaccordancewithInternationalStandardsonAuditing.Thesestandardsrequirethat
weplanandperformtheaudittoobtainreasonableassuranceaboutwhetherthefinancialstatementsarefreeof
materialmisstatement.Anauditincludesexamining,onatestbasis,evidencesupportingtheamountsanddisclos
uresinthefinancialstatements.Anauditalsoincludesassessingtheaccountingprinciplesusedandsignificant
estimatesmadebytheBoardofDirectorsaswellasevaluatingtheoverallfinancialstatementspresentation.We
believethatourauditprovidesareasonablebasisforouropinion.
Inouropinion,theattachedfinancialstatementsgive,inconformitywiththeLuxembourglegalandregulatory
requirementsatrueandfairviewofthefinancialpositionofSociétéGénéraleBank&TrustS.A.atDecember31,
2005andtheresultsofitsoperationsfortheyearthenended.
Themanagementreportisconsistentwiththeannualfinancialstatements.
eRNST&YOuNG
SociétéAnonyme
IndependentAuditor
Jean-Michel PACAUD
Luxembourg, March 9, 2006
Report of the Independent Auditor
ANNuALRepORT2005■SOCIeTeGeNeRALeBANk&TRuST8�
Thecompleteabridgedversionoftheparentcompanyfinancialstatementsisavailableonrequest.
ASSETS 2005 2004
Cash, due from central banks and post office accounts 68,862,880 26,122,023
Loans and advances to credit institutions 9,854,354,775 7,980,801,928
Demand �21,20�,82� 2��,11�,�8�
Otherreceivables 9,233,1�8,9�8 �,�3�,�8�,2�1
Loans and advances to customers 9,972,792,131 5,952,997,514
Debt securities and other fixed-income securities 5,220,694,087 4,721,980,532
Treasurynotesandsimilarsecurities �,8�9,���,�9� �,��2,0�2,�0�
Bondsandotherdebtsecurities 3�1,239,�93 2�9,90�,92�
Shares and other variable-yield securities 1,055,895,859 330,403,034
Participating interests 55,069 55,437
Shares in affiliated undertakings 294,167,868 287,080,904
Intangible fixed assets 5,091,229 1,251,658
Tangible fixed assets 4,520,624 4,050,735
Other assets 49,698,450 31,227,390
Prepayments and accrued income 537,766,195 368,618,644
27,063,899,167 19,704,589,799
Balance sheet at December 31, 2005 (in EUR)
ANNuALRepORT2005■SOCIeTeGeNeRALeBANk&TRuST 8�
Thecompleteabridgedversionoftheparentcompanyfinancialstatementsisavailableonrequest.
lIABIlITIES ANd SHArEHoldErS’ EQuITy 2005 2004
Amounts owed to credit institutions 15,841,740,321 12,571,411,149
Demanddeposits 1,211,18�,3�3 ��8,02�,�8�
Termdepositsandsubjecttonotice 1�,�30,��2,9�8 12,003,38�,���
Amounts owed to customers 7,639,531,461 3,693,226,749
Otherdeposits:
Repayableondemand 3,003,808,��8 1,��8,0�2,�03
Withagreedmaturitydatesorperiodofnotice �,�3�,�22,913 2,12�,1��,1��
Debts evidenced by certificates 1,076,901,401 979,084,554
Bondborrowings 8�,���,31� ��,2�1,20�
Relatedpayables 992,13�,08� 90�,813,3�8
Other liabilities 88,026,774 162,065,551
Accruals and deferred income 497,484,651 430,426,665
Provisions for liabilities and charges 63,507,108 57,031,453
Provisionsforpensionsandsimilarobligations 8,2�2,12� �,81�,9��
Provisionsfortaxes �0,���,2�� 3�,980,390
Otherprovisions 1�,��8,�0� 1�,23�,10�
Subordinated debt 126,224,508 156,714,310
Special items with a reserve quota portion 17,254,770 17,254,770
Fund for general banking risks 2,250,601 2,250,601
Subscribed capital 1,179,042,732 1,179,042,732
Share premium 2,816,416 2,816,416
Reserves 101,373,375 72,956,631
Retained earnings 316,520,192 260,391,337
Net income for the year 111,224,857 119,916,881
27,063,899,167 19,704,589,799
ANNuALRepORT2005■SOCIeTeGeNeRALeBANk&TRuST8�
2005 2004
Contingent liabilities 330,430,345 206,686,305
Ofwhich:
[Acceptancesandcommitmentsonendorsementsofrediscountedbills] [1,019,0��] [�8,29�]
[Guaranteesandassetspledgedascollateral] [110,���,3��] [3�,�91,��2]
Commitments 1,540,508,757 198,096,377
Fiduciary operations 2,481,486,059 2,253,470,931
Off-balance sheet items at December 31, 2005 (in EUR)
Thecompleteabridgedversionoftheparentcompanyfinancialstatementsisavailableonrequest.
ANNuALRepORT2005■SOCIeTeGeNeRALeBANk&TRuST 8�
2005 2004
Interest and similar income 936,528,734 788,941,387Ofwhich:
[Fromfixed-incomesecurities] [1�0,188,�03] [13�,38�,983]
Interest and similar charges (797,776,759) (675,448,336)
Income from securities transactions 41,667,325 55,680,604Incomefromsharesandothervariable-yieldsecurities 39,983,98� ��,20�,��3Incomefromparticipatinginterests - 1�,��1Incomefromsharesinaffiliatedundertakings 1,�83,3�1 ���,�00
Fee income 147,059,731 112,183,944
Fee expense (74,550,231) (54,131,584)
Net income on financial transactions (32,160,453) (33,280,947)
Other operating income 4,940,412 6,134,810
General administrative expenses (80,553,154) (64,498,726)Personnelexpenses (��,��8,�0�) (��,�3�,8�8)Ofwhich:
[Employeecompensation] [3�,�0�,�12] [2�,12�,9��][Socialsecuritybenefitsandpayrolltaxes] [�,81�,22�] [�,���,�92]Ofwhich:
[Pension-relatedbenefitsandtaxes] [2,�90,�9�] [2,�02,08�]Otheradministrativeexpenses (22,90�,���) (1�,9�0,8�8)
Value adjustments in respect of tangible and intangible asset revaluations (2,440,260) (2,063,279)
Other operating charges (1,510,320) (1,018,972)
Value adjustments in respect of loans, advances and provisions for contingent liability and commitments (13,757,493) (2,900,000)
Value re-adjustments in respect of loans, advances and provisions for contingent liabilities and commitments 914,324 6,806,278
Exceptional losses (11,540) (1,840)
Tax on ordinary and exceptional income (17,125,459) (16,486,458)
Net income 111,224,857 119,916,881
Income statement at December 31, 2005 (in EUR)
Thecompleteabridgedversionoftheparentcompanyfinancialstatementsisavailableonrequest.
design and printing
ImprimerieCentrale
Paintings
CarolineDujardin
www.carolinedujardin.net
exhibitionSeptember15–October28,2005
inthepremisesofSociétéGénéraleBank&TrustLuxembourg
on the back cover
Atlas marocain
November 2003
Caroline Dujardin
on the cover page
La mare aux fées (Detail)
January 2001
Caroline Dujardin
on the right page
Rivages (Detail)
March 2005
Caroline Dujardin
Société Générale Bank & Trust
Société Générale Bank & Trust
11 avenue Emile ReuterL-2420 LuxembourgRCS Luxembourg B 6061Tel. +352 47 93 11-1Fax +352 22 88 59
annual Report
2005