Société Générale — Annual Report 2004

Aug 3, 2005

annual report

2004 société générale group

RETAIL BANKING & FINANCIAL SERVICES ■ GLOBAL INVESTMENT MANAGEMENT & SERVICES ■ CORPORATE & INVESTMENT BANKING

Contents

Profile	1
Chairman's statement	2
Strategy	4
Facts and figures	7
2004 key figures	8
Group activity in 2004	10
The Société Générale share	14
The Investor relations	17
Corporate governance	21
Information on corporate governance	22
Board of Directors	28
Executive Committee	32
Group Management Committee	33
Remuneration of senior managers	34
Stock options	36
Corporate social responsibility	39
Fully committed to corporate social responsibility	40
The challenges facing the Group	42
The Group's commitments	43
Managing our corporate social responsibility	44
The Group's achievements	46
Responsible banking practices	48
Compliance and the prevention of money laundering	48
Risk management and internal control	50
Responsibility to our customers	54
Relationships with our suppliers	59
Local development and corporate sponsorship	60
Working to protect the environment	63
Human resources	65

Activity 2004	73
Retail Banking	74
Société Générale Network	76
Crédit du Nord Group Network	82
Retail Banking outside France	84
Specialized Financial Services	88
Global Investment Management and Services	92
SG Asset Management	94
Private Banking	98
Global Securities Services for Investors	100
Boursorama	102
Corporate and Investment Banking	104
Financial statements	113
Legal information	273
Cross-reference index	311

This document is a full translation of the original French text. The original document was filed with the Autorité des Marchés Financiers (French Securities Regulator) on March 21, 2005 in accordance with Article 211-6 of the general regulations of the AMF. As such, it may be used in support of a financial transaction when accompanied by a prospectus duly approved by the AMF. The report is available online at www.socgen.com.

The Société Générale Group also publishes a social audit for the previous financial year in accordance with Law 77-769 of July 12, 1977.

Bernard Quesniaux Born 1953 in La Flèche, France Untitled, 1993 Aquatint, 28 x 38 cm

In 1995, to coincide with the completion of the Tour Société Générale at La Défense, the Group acquired a series of works by contemporary artists. The collection has since been expanded, notably with the addition of four new pieces in 2004, and is on display to the general public in Paris and at various locations around France. The Group has selected a number of works to illustrate its 2004 annual report and highlight its commitment to arts sponsorship.

Profile

Société Générale is one of the leading financial services groups in the euro zone.

The Group employs 92,000 people worldwide in three core businesses:

■ Retail Banking and Financial Services:

the Group serves over 16 million customers in France and abroad;

■ Global Investment Management and Services:

Société Générale ranks among the top tier of euro-zone banks with EUR 315 billion of assets under management and over EUR 1,115 billion of assets under custody at December 31, 2004;

■ Corporate and Investment Banking:

SG Corporate & Investment Banking (SG CIB) ranks among the European and global leaders in euro capital markets, derivatives and structured finance.

The Group's core values are professionalism, team spirit and innovation.

Société Générale is included in the four major international socially responsible investment indexes.

AA– (Standard & Poor's), Aa2 (Moody's), AA– (Fitch)

No.1 non-mutual retail banking group in France (1) —

3rd largest corporate and investment bank in the euro zone (2) —

4th largest euro-zone bank in asset management (3) —

7th largest market capitalization in France (EUR 33.1 billion at Dec. 31, 2004) (4)

—

(1) By net banking income and number of branches (Source: Société Générale and company annual reports) – (2) By ordinary pre-tax profit (Source: Société Générale and company annual reports) – (3) By assets under management (Source: Société Générale and company annual reports) – (4) Source: Bloomberg.

Chairman's statement

Daniel Bouton Chairman and Chief Executive Officer 2004 was marked by strong, but unevenly distributed, economic growth. China and the US saw robust levels of activity, while European countries posted a more moderate economic performance. Structural imbalances in the global economy weighed on the dollar and led to an increase in commodity prices, notably in oil, albeit with no major impact on the financial markets. Long-term interest rates remained low, while the US Fed began to implement a policy of gradual monetary tightening, and equity markets recorded an upturn.

Société Générale's businesses successfully adjusted to this mixed backdrop, enabling the Group to post an excellent year with net income of EUR 3.1 billion, representing a 25.4% increase, and a return on equity (ROE) after tax of nearly 18.9%.

This performance can be partially attributed to an exceptionally low cost of risk. The Group benefited from the general improvement in corporate balance sheets, but also from enhancements to its credit risk management and its conservative, high quality provisioning over recent years.

Above all, 2004's results reflect the commitment on the part of all our staff to fostering greater growth and profitability.

Société Générale's traditional core businesses confirmed their capacity to make a recurrent, solid contribution to Group results:

■ The French Retail Banking Networks, operating under the Société Générale and Crédit du Nord brands, continued to grow their franchises in line with the strategy of steady gains in market share, and thus asserted the strength of their positions. The division maintained its focus on service quality, with the aim of preserving its brand image with customers. 2004 also saw the full operational launch of the multichannel distribution platform, and further efforts to centralize the backoffice functions in order to generate productivity gains over the next few years.

■ The Corporate and Investment Banking division delivered excellent performances in 2004, with no increase in its exposure to market risk. SG Corporate & Investment Banking confirmed its global leadership, particularly in equity derivatives and structured finance, including export and commodity finance, and made considerable advances in its other target businesses in Europe (euro capital

" The Société Générale Group posted strong profitability in 2004."

markets). The division recorded a net write-back of risk provisions, posting an exceptionally high ROE after tax of 41.4%.

These two core businesses will continue to expand, building on their existing high quality franchises and making continued improvements to the standard of customer service.

2004 also saw renewed development in our growth drivers, Financial Services, Retail Banking outside France and the new Global Investment Management and Services division (GIMS), which combines all asset management and securities activities. The Group has been investing heavily in these businesses for over five years, and the strategy has paid off with strong growth in net banking income.

■ On the basis of all commercial and financial indicators, these growth drivers now account for more than a third of the Group's business.

■ In 2004 these divisions primarily expanded through organic growth, with investments in the distribution network and marketing initiatives to attract new customers. However, the Group also made a number of acquisitions (the Scandinavian leasing firm, Elcon, and the retail bank, General Bank of Greece) and signed various partnership agreements, notably in the Asian asset management market (State Bank of India, Resona in Japan, IBK in South Korea).

Over the coming years, we expect these businesses to capitalize on their existing market share and harness synergies within the Group to deliver strong organic growth, and also to make further acquisitions that can be effectively integrated into our existing platforms.

In conjunction with these commercial developments, the Group continued to adapt its management techniques and organizational structure over the year. With high liquidity driving bank margins and, in particular, credit margins to historical lows, we need to concentrate more than ever on risk management, improvements in operating efficiency and the creation of shareholder value through our acquisitions.

■ The Group is constantly strengthening its risk management techniques. As a result:

• we have improved our active credit risk management, at client level, and our risk diversification;

• the retail banking business in Argentina was sold off at the start of 2005;

• we have maintained a sound balance between client-driven and proprietary trading revenues, keeping our exposure to market risk stable.

■ With respect to operating efficiency, Société Générale further reduced its cost/income ratio in 2004, through the introduction of numerous internal measures to enhance customer service and streamline the organizational structure. We have pooled and harmonized existing IT systems, defined consistent purchasing policies and made improvements to transaction processing. In particular, the Bank has incorporated the activities of FIMAT (a leading global broker), Société Générale's securities custody business and Boursorama under its new GSSI division (Global Securities Services for Investors), bringing together a broad range of securities expertise in order to provide coherent, tailored solutions for the needs of investors and optimize its investments in these areas.

■ The creation of value forms the basis of all our day-to-day management decisions and investment projects. We aim to foster profitable growth and encourage our teams to assume increased responsibility, in line with the expectations of our shareholders.

This strategy has enabled Société Générale to assert its financial solidity (Moody's raised the Group's long-term rating to Aa2 at the start of 2005) and its position as the 6th largest bank in the euro zone in terms of market capitalization. The Group is now fully prepared for the transition to IFRS in 2005 and is getting ready to adopt the new Basel II capital adequacy framework.

2004's dynamic performance is the result of concerted efforts on the part of our 92,000 staff, based on shared values of innovation, professionalism and team spirit, geared towards the needs of our customers.

" At the start of 2005, Moody's raised the Société Générale Group's long-term rating to Aa2, confirming its financial strength."

Strategy

Three strategic priorities: balanced business mix, long-term growth and operating efficiency

Maintenance of a balanced business mix and risk profile

At the end of the 1990's, the Group began a strategic realignment of its business mix, shifting a portion of its capital allocation from Corporate and Investment Banking to its other target activities. Going forward, Société Générale will continue to pursue a policy of balanced growth, maintaining an even weighting in the contributions of the French Networks, Corporate and Investment Banking and the growth drivers: Financial Services, Retail Banking outside France and Global Investment Management and Services. This balanced business mix and risk profile will enable the Group to deliver strong growth and profitability.

Targeting of high-growth geographical regions and businesses

In the light of underlying trends in the global economy, Société Générale intends to reinforce its positions in geographical regions and businesses offering the best long-term growth prospects. The Group will achieve this through organic growth based on the transfer of its domestic expertise (among the projects already underway: Retail Banking in Russia, Corporate and Investment Banking in Asia), through partnerships (for example, in asset management) or through acquisitions, if any opportunities arise that meet our strict criteria for value creation.

Renewed efforts to enhance operating efficiency

Alongside these growth initiatives, the Group will remain focused on reducing its operating costs and generating productivity gains.

NET BANKING INCOME OF THE CORE BUSINESSES

OPERATING INCOME OF THE CORE BUSINESSES

SOCIÉTÉ GÉNÉRALE GROUP - 2004 ANNUAL REPORT

Olivier Mosset, Born 1944 in Bern, Switzerland Untitled, 1993 Screen-print 69 x 69 cm

Facts and figures

2004 key figures

GROUP CONSOLIDATED FIGURES

	2004	2003	2002	2001	2000
Results (in millions of euros)
Net banking income (1)	16,416	15,637	14,573	13,966	13,799
Operating income	4,908	3,843	2,746	2,703	3,392
Net income before minority interests	3,465	2,755	1,651	2,327	2,877
Net income (2)	3,125	2,492	1,397	2,154	2,698
Retail Banking and Financial Services (3)	1,615	1,377	1,243	1,142	1,014
Global Investment Management and Services (3)	392	290	310	252	257
Corporate and Investment Banking	1,459	1,052	470	654	1,144
Corporate Center and other	(341)	(227)	(626)	106	283
Activity (in billions of euros)
Total assets and liabilities (4)	601.1	539.4	501.4	512.5	455.9
Customer loans (4)	198.9	177.5	174.2	166.3	148.5
Customer deposits	174.5	160.2	152.8	150.5	123.7
Assets under management	315	284	269	297.7	203.9
Equity (in billions of euros)
Consolidated shareholders' equity	18.6	16.9	15.7	15.8	13.7
Total equity (5)	23.0	21.3	19.5	19.9	16.9
Average headcount (6)	93,359	90,040	88,278	86,574	71,149

(1) 2001 and 2002 figures restated for operating expenses previously charged against net banking income, in accordance with 2004 methodology.

(2) 2002 and 2003 figures restated for internal transfer of activities.

(3) 2001 and 2002 figures restated for internal changes made to the Group's structure in 2003.

(4) 2001 and 2002 figures restated in relation to the presentation used in 2001 and 2002 for annual reports.

(5) Consolidated shareholders' equity, minority interests, general reserve for banking risks and

preferred shares. (6) Including temporary staff.

CONTRIBUTION OF CORE BUSINESSES TO NET INCOME

In millions of euros

Corporate and Investment Banking (ROE after tax: 41.4%)

Global Investment Management and Services Financial Services Retail Banking 1,615 Retail Banking

—

Core businesses

Corporate Center (341)

—

Robust performances from all the core businesses —

Net income EUR 3.1 billion: +25.4%

Operating income EUR 4.9 billion: +27.7%

2004 KEY FIGURES 8_9

NET INCOME in billions of euros NET BANKING INCOME in billions of euros

in billions of euros

B.I.S. RATIO % at year-end

SHAREHOLDERS' EQUITY In billions of euros

ROE AFTER TAX %

Growth in results over the medium term —

Solid fundamentals —

Sound Group profitability —

ROE after tax: 18.9% —

ROE = Return On Equity.

SOCIÉTÉ GÉNÉRALE GROUP - 2004 ANNUAL REPORT

Group activity in 2004

Overview of activity in 2004

The Group's activity is well balanced between three core businesses:

■ Retail Banking and Financial Services, which groups:

• the Société Générale and Crédit du Nord Group networks in France,

• Financial Services: specialized finance for business and individual customers, life and property insurance,

• Retail Banking outside France.

■ Global Investment Management and Services, comprising asset management, private banking, Boursorama and the newly created securities arm, which groups together the following: (i) Fimat, the Group's brokerage arm specializing in listed derivatives, (ii) all securities services for institutional investors, management companies, investment banks, market intermediaries and

individuals, and (iii) securities services and employee savings for business customers.

■ Corporate and Investment Banking, which covers:

• Corporate Banking and Fixed Income;

• Equity and Advisory.

Alongside these three core businesses, the Corporate Center manages the Group's proprietary investments (the Group's industrial equity and real estate portfolios as well as its equity investments in banks), looks after the Group's asset and liability management, acts as the central funding department, and bears the cost of goodwill amortization charges for all the Group's operating divisions.

As in 2003, Retail Banking and Financial Services and Global Investment Management and Services together accounted for nearly three quarters of capital allocated to the core businesses (including non-amortized goodwill) in 2004.

The Group confirmed its ability to deliver strong growth over the year, thanks to its well-balanced business mix and the dynamic contribution of its growth drivers – Retail Banking outside France,

In billions of euros	2003	2004	Variation
Net banking income	15.6	16.4	+ 5.0%	+ 6.0% (1)
Operating expenses	(10.6)	(11.0)	+ 3.8%	+ 2.9% (1)
Gross operating income	5.1	5.4	+ 7.5%	+ 12.7% (1)
Net allocation to provisions	(1.2)	(0.5)	– 55.9%	– 56.3% (1)
Operating income	3.8	4.9	+ 27.7%	+ 36.2% (1)
Net income from long-term investments	0.4 (2)	0.1
Amortization of goodwill	(0.2)	(0.2)
Exceptional items and generalreserve for banking risks	(0.2)	(0.0)
Net income	2.5	3.1	+ 25.4%	+ 35.0% (1)
Group ROE after tax	16.2%	18.9%
Business line ROE after tax	24.0%	28.3%
Tier-one ratio	8.7%	8.5%

(1) When adjusted for changes in Group structure, at constant exchange rates and excluding the capital gain of EUR 187 million on the disposal of the Trocadéro property booked under NBI in the first quarter of 2003.

(2) Of which exceptional capital gain on Crédit Lyonnais: EUR 242 million before tax in the second quarter of 2003.

Financial Services and Global Investment Management & Services. Net banking income in the Corporate and Investment Banking arm remained stable with respect to 2003, which was already a high base, and the proportion of client-driven revenues increased. All the Group's other businesses posted a rise in revenues, notably the growth drivers.

Growth in business activities

In 2004, the Group continued to expand its franchises in all its businesses, through a combination of organic growth and acquisitions.

The French Networks registered a 2.2% increase in the number of current accounts, despite a banking penetration rate of close to 100% in the French market. New loan issuance and inflows into personal savings products, particularly life insurance products, remained robust over the year.

Retail Banking outside France continued to expand at a dynamic pace, through organic growth and acquisitions. In 2004, it notably integrated General Bank of Greece (GBG), following the acquisition of a majority stake (50.01%). The core of the division's activities shifted towards Europe over the year, and it now derives some 70% of its revenues from subsidiaries in EU member states and accession countries. The Financial Services arm has become a major European player with a well diversified geographical presence, generating more than 60% of its revenues outside France. In 2004, it integrated the Equipment Finance and Factoring activities of the Norwegian player, Elcon.

The Global Investment Management and Services division posted record net inflows of EUR 24.8 billion in 2004, bringing total assets under management to EUR 315 billion at December 31, 2004.

The Corporate and Investment Banking arm retained its leading position in derivative products and structured finance, and consolidated its share of client-driven revenues. Revenues from trading and arbitrage activities accounted for only 30% of total NBI in 2004, compared with 34% in 2003.

Total net banking income for the Group rose by 5.0%, to

AVERAGE CAPITAL ALLOCATED TO THE CORE BUSINESSES

(excl. Corporate Center), including non-amortized goodwill

NET BANKING INCOME

In billions of euros

EUR 6.4 billion (+6.0% when adjusted for changes in Group structure and at constant exchange rates). Revenues grew by 3.9% in the French Networks, +16.3% in Retail Banking outside France, +12.7% in Financial Services and +14.3% in Global Investment Management and Services. On a same scope and currency basis, Corporate and Investment Banking posted a 1.6% rise in revenues on 2003, which was a particularly high base. The Group's NBI growth is primarily derived from the expansion of its existing franchises, coupled with a few targeted acquisitions in its growth drivers over 2004.

Tight cost control and further reductions in the cost/income ratio

In 2004, the Group continued to rationalize its operating expenses, focusing on three main areas:

• roll-out of the multi-channel distribution platform and centralization of the back-office functions,

• centralization of Group purchases,

• integration of acquisitions and harnessing of synergies.

The Group's operating expenses grew at a slower pace than its revenues, coming out at EUR 11.0 billion, up just 3.8% on 2003 (+2.9% when adjusted for changes in Group structure and at constant exchange rates). This increase reflects the Group's ongoing investment policy, coupled with tight control of its operating expenses.

The Group's cost/income ratio stood at 66.8% for the year, down from 67.6% in 2003.

The combination of NBI growth and effective cost control pushed Group gross operating income up 12.7% (when adjusted for changes in Group structure, at constant exchange rates and excluding the capital gain of EUR 187 million on the disposal of property booked under NBI in the first quarter of 2003).

Low level of risk provisioning

The net allocation to provisions fell by 56% over the year to a particularly low level, reflecting a favorable credit environment and specific factors within the Group, namely the systematic diversification of the business portfolio, improved risk management and conservative provisioning of risk exposure. In 2004, the cost of risk for the French Networks came out at 32 bp of riskweighted assets compared with 37 bp in 2003, confirming the structural improvement in the division's risk profile. Risk provisioning in Retail Banking outside France and Financial Services was reduced by 6%. The Corporate and Investment Banking arm booked a net write-back of EUR 60 million for the year as a whole, achieved exclusively through the write-back of specific provisions following the sale or reimbursement of loans, with no write-back from the general credit risk reserve.

Strong growth in results

Thanks to the low level of risk provisioning over the year, the Group was able to post strong growth in its operating income: +36.2% on a like-for-like basis and excluding the capital gain on the disposal of property. Group net income stood at EUR 3.1 billion, up 25.4% on 2003. Operating income rose sharply to EUR 4.9 billion (+28% in absolute terms, +36% when adjusted for changes in Group structure, at constant exchange rates and excluding the capital gain on the disposal of property).

In a stock market environment lacking clear-cut trends, and in the absence of major deals, net income from long-term investments stood at EUR 119 million for the year. After goodwill amortization, corporate income tax (effective annual tax rate of 28%) and minority interests, net income totalled EUR 3.1 billion, up 25% on 2003. Group ROE after tax stood at 18.9% for the year, compared with 16.2% in 2003.

The Group's financial structure remains solid: at December 31, 2004, its Tier-one ratio stood at 8.54%.

GROUP COST/INCOME RATIO

GROUP OPERATING INCOME

In billions of euros

The Société Générale share

Stock market performance

Société Générale's share price rose by 6.4% in 2004, closing at EUR 74.45. In comparison, the CAC 40 index gained 7.4% and the EURO STOXX BANK index rose by 10.9% over this period.

At December 31, 2004, the Société Générale Group's stock market capitalization amounted to EUR 33.1 billion, which ranked it seventh among CAC 40 stocks (fifth largest stock in terms of free float) and sixth among euro-zone banks.

The market for the Group's shares remained highly liquid in 2004, with an average daily trading volume on the CAC 40 of EUR 129 million, representing a daily capital rotation rate of 0.41% (versus 0.48% in 2003). In value terms, Société Générale's shares were the eighth most actively traded in the CAC 40 index.

Stock exchange listing

Société Générale's shares are listed on the Paris Bourse (deferred settlement market, continuous trading group A, share code 13080) and on the Tokyo stock exchange. They are also traded in the United States under an American Depositary Receipt (ADR) program.

Stock market indexes

The Société Générale share is a component stock of the CAC 40, EURO STOXX 50, MSCI Europe, FTSE Eurotop, FTSE4GOOD and Dow Jones Sustainability Index World indexes. It was included in the STOXX 50 (index of the 50 largest stock market capitalizations in Europe) on September 20, 2004.

Total return (1) for shareholders

The following table shows the overall return on investment for Société Générale shareholders over different time periods ending December 31, 2004. The figures are given as a cumulative total and an annualized average. For example, an investor holding Société Générale shares from January 1, 2000 to December 31, 2004 (i.e. over five years) would have obtained a cumulative total return (1) of 64% over the period, or an average of 10.4% per year.

Dividend history

Between 1999 and 2004, the dividend paid by the Société Générale Group rose by an average of 16.3% per year.

The Group's aim is to raise the payout ratio with respect to the average for the past few years, to a level close to 45%.

TOTAL RETURN (1) FOR SHAREHOLDERS

Duration ofshareholding	Date	Cumulativetotal return (1)	Annualized averagetotal return (1)
Since privatization	Jul. 9, 1987	885%	14.0%
15 years	Jan. 1, 1990	600%	12.9%
10 years	Jan. 1, 1995	430%	16.4%
5 years	Jan. 1, 2000	64%	10.4%
4 years	Jan. 1, 2001	37%	8.2%
3 years	Jan. 1, 2002	38%	11.4%
2 years	Jan. 1, 2003	50%	22.5%
1 year	Jan. 1, 2004	12%	12.2%

Source: Bloomberg

DIVIDEND, PAYOUT RATIO AND YIELD

	2004	2003	2002	2001	2000
Net dividend (in EUR)	3.30 (3)	2.50 (2)	2.10 (2)	2.10 (2)	2.10 (1)
Payout ratio (%) (4)	43	41	62	39	31
Net yield (%) (5)	4.4	3.6	3.8	3.3	3.2

(1) Total return = capital gain + gross dividend (including tax credit) reinvested in shares.

(2) Individual investors have a tax credit of 50%.

(3) Submitted to the Annual General Meeting of Shareholders for approval.

(4) Net dividend/earnings per share.

(5) Net dividend/closing price at end-December.

STOCK MARKET DATA		Dec. 31, 2004	Dec. 31, 2003	Dec. 31, 2002	Dec. 31, 2001	Dec. 31, 2000
Common stock (number of outstanding shares)Market capitalization (in EUR billion)		445,153,15933.1	438,434,74930.7	430,170,26523.9	431,538,52227.1	423,248,41828.0
Earnings per share (in EUR)		7.65	6.07	3.41	5.35	6.78
Book value per share at year-end (in EUR)		45.5	41.0	38.4	38.6	34.4
Share price (in EUR)	High	75.5	70.0	80.5	74.6	70.1
	Low	65.0	42.9	38.1	45.9	48.2
	Close	74.5	70.0	55.5	62.9	66.2

SHARE PERFORMANCE VERSUS CAC 40 (1) AND DJ EURO STOXX BANK (1) INDEXES SINCE DECEMBER 31, 2003 (1) Base = Société Générale share price

MONTHLY EVOLUTION OF SHARE PRICE

SOCIÉTÉ GÉNÉRALE GROUP - 2004 ANNUAL REPORT

Common stock

At December 31, 2004, the Group's common stock comprised 445.2 million shares with a nominal value of EUR 1.25 per share.

This increase of 6.7 million in the number of outstanding shares during 2004 breaks down as follows:

• 5.2 million shares issued and subscribed for by Group employees under the Company-sponsored employee share ownership plan.

• 1.5 million shares issued following the exercise of stock options. If all vested stock options were to be exercised, 448.5 million shares would be issued, representing a maximum potential dilution of 0.74%. The Group's common stock would then amount to EUR 560,585,283.75, divided into 448,468,227 shares.

Share buybacks

Since the launch of its share buyback program in September 1999, Société Générale has bought back 65.1 million of its own shares, for a total net amount of EUR 3.8 billion. In February 2002, it cancelled 7.2 million shares, representing a total of EUR 438 million. In 2004, the Group bought back 14 million shares for a total of EUR 961 million and sold or transferred 4.7 million shares with a book value of EUR 271 million.

At December 31, 2004, the Group held 30.4 million of its own shares (excluding 9 million treasury shares, representing 2.02% of share capital), representing 6.82% of the share capital and a book value of EUR 1,831 million. Of this total, 15.7 million shares with a book value of EUR 844 million are used to cover stock options granted to employees. At its meeting of February 9, 2005, the Board of Directors cancelled 11 million Société Générale shares, under the authorization granted by the General Meeting of Shareholders of April 29, 2004.

Changes in share ownership

In 2004, the "Fonds E" (the Société Générale employee share ownership plan) reduced its stake in Société Générale's capital from 8.03% to 6.88%.

BREAKDOWN OF CAPITAL AND VOTING RIGHTS (1) OVER 3 YEARS

		At Dec. 31, 2004		At Dec. 31, 2003		At Dec. 31, 2002
	%of capital	% of votingrights	%of capital	% of votingrights	%of capital	% of votingrights
Employees and former employeesvia the Group employee share
ownership plan	7.42	13.57	8.46	14.21	7.83	13.11
Groupama	2.97	2.92	3.02	2.89	3.08	2.82
Meiji Yasuda Life Insurance Cy	2.49	4.73	2.52	4.68	2.97	5.28
CDC (general section)	1.87	3.10	1.97	3.14	1.88	2.94
Fondazione CRT	1.66	1.63	1.68	1.61	(2)	(2)
Dexia	1.44	1.42	1.31	1.26	1.40	1.28
Aviva	1.39	1.37	1.37	1.33	4.14	4.51
PSA	(2)	(2)	0.80	1.38	1.66	3.00
Pernod Ricard	(2)	(2)	(2)	(2)	0.69	1.26
Free float	71.92	71.26	72.01	69.50	70.80	65.80
Buybacks	6.82	0.00	4.81	0.00	3.46	0.00
Treasury stock	2.02	0.00	2.05	0.00	2.09	0.00
Total	100.00	100.00	100.00	100.00	100.00	100.00
Number of outstanding shares	445,153,159	452,307,138	438,434,749	457,086,131	430,170,265	469,480,478

To the best of Société Générale's knowledge, no other shareholders hold more than 1% of the capital or voting rights (excluding undertakings for collective investment in transferables securities (UCITS)).

(1) Including double voting rights (Article 14 of the Company's by-laws).

(2) Shareholders with less than 1% of capital or voting rights.

SHARE OWNERSHIP STRUCTURE AT DECEMBER 31, 2004

Investor relations

Nurturing quality long-term relationships with our shareholders

A dedicated team

Investor relations are managed on a day-to-day basis by a dedicated team, split between institutional investors and individual shareholders. This team applies the principles defined by the Group in terms of financial information disclosure and promotes a policy based on active dialogue and proximity.

Four long-standing guiding principles

Since its privatization, Société Générale's financial information policy has been based on four guiding principles:

• equal access to information for all shareholders, and immediate availability;

• involvement of investors in the Group's development;

• compliance with recommended deadlines for the publication of company accounts;

• transparent information.

Any financial information liable to influence the Group's share price is published in a press release in French and English and is immediately available online at www.ir.socgen.com.

The Group's financial results are published within 24 hours of their approval by the Board of Directors.

Following the publication of a press release, financial analysts, institutional investors and financial journalists are invited to a presentation followed by a Q&A session. To facilitate participation in these conferences, they are accessible by telephone and over the Internet, both live and as a recording.

Presentations are then made over subsequent weeks in the leading financial centers in Europe and North America, in the form of conferences or one-on-one meetings.

These presentations are also adapted for meetings organized with individual shareholders in France.

The Group also organizes specific presentations of its mediumterm financial and strategic plans, to encourage in-depth dialogue between management and investors.

The annual results are published before the end of February each year, the half-yearly results in late July or early August and the quarterly results within 45 days of the closing of the quarterly accounts. These results are presented for each core business (Retail Bank-

The Shareholders' Consultative Committee —

This committee was set up in 1988 and has 14 members, including two representatives of shareholders' associations, who have a permanent mandate, and 12 individual shareholders with three-year mandates.

It meets with Group General Management to voice the concerns of individual shareholders, and has a twofold mission:

• to express an opinion on Société Générale's communication with its shareholders;

• to suggest improvements and new ideas in this respect.

The Shareholders' Consultative Committee met twice in 2004. The first meeting discussed the enlargement of the Shareholders' Club (by reducing the minimum shareholding requirement to 100 Société Générale shares) and the Committee's formal representation at the Annual General Meeting on April 29, 2004. The enlargement of the Shareholders' Club took effect as of the renewal of Club membership cards at the end of 2004.

The second meeting covered the annual report and ways of optimizing its use among individual shareholders.

THE SHAREHOLDERS' CONSULTATIVE COMMITTEE

From left to right: Guillaume Raffy, Patrice Leclerc (President of Club Assact SG), Michel Gouy, Christiane Tincelin, Marcel Tixier (President of ANAF), Brigitte Reech, Philippe Citerne, Sylvie Owen, Guy Scherrer, Eric Pérouse, Patrick Bindschedler, Kathleen O'Donoghue. Not pictured: Martine Adam-Roussel, Florence Klein-Bourdon, Annie Méa.

ing and Financial Services, Global Investment Management and Services, and Corporate and Investment Banking) then broken down by business line.

A comprehensive system of dialogue

For several years now, Société Générale has maintained regular and direct contact with its individual shareholders and institutional investors.

In 2004, 900 shareholders attended the Annual General Meeting.

Individual shareholders

Direct contact Meetings:

Three major meetings (Nice, Bordeaux and Nogent-sur-Marne) and five local meetings across France, attended by several thousand shareholders.

Shareholders' forum: Actionaria (several hundred contacts).

Shareholders' Consultative Committee: 2 meetings per year.

Shareholders' Club activities: attended by nearly 30,000 shareholders in 2004 (those with a minimum of 200 shares – this level was lowered to 100 shares as of January 1, 2005). Visits to Tour Société Générale, concerts, conferences on art and winemaking, trips, etc.

Written communication

Letter to Shareholders: 4 issues each year, following the publication of the quarterly results. Over 60,000 subscribers.

Shareholders' Club Newsletters: issued quarterly to around 30,000 members of the Shareholders' Club.

Telephone contact

Toll-free number in France: 0 800 850 820

Free telephone service providing information on the share price, and recorded news (updated each week). Shareholders can also talk directly to the individual investor relations team. 75,000 calls and nearly 2,000 direct discussions per year.

Institutional investors

Direct contact

Roadshows: several hundred meetings per year with analysts and investors. Conferences: 7 conferences on specific themes this year (3 in

Paris, 3 in London and 1 in Monte Carlo).

Meetings at Tour Société Générale:

groups of investors are invited to meet the Group General Management.

An investor day at Tour Société Générale.

Written communication

Press releases.

Results presentations are posted online four times a year, along with all public presentations.

Telephone contact

• 33 (0)1 42 14 47 72

Internet

Website: www.ir.socgen.com Contents: annual reports (since 1997), quarterly results (since 1999), events calendar, contacts, Société Générale share price, press releases.

Several thousand visits per year.

INVESTOR RELATIONS

Individual shareholders

Toll-free number (France only): 0 800 850 820 Fax: 33 (0)1 41 45 92 27 E-mail: actionnaires.individuels@socgen.com

Institutional investors

Telephone: + 33 (0)1 42 14 47 72 Fax: + 33 (0)1 42 13 00 22 E-mail: investor.relations@socgen.com Dedicated website: www.ir.socgen.com

Participation in the Annual General Meeting

The Annual General Meeting (AGM) is an opportunity for shareholders to gain direct information on the Company, take part in debates and vote on the resolutions submitted for their approval.

How are shareholders informed about the AGM?

One month before the AGM, a notice of meeting is published in the French Bulletin of Mandatory Legal Notices (BALO), containing the agenda and the resolutions to be submitted for approval. Two weeks before the AGM, a notice of meeting gives the time, date and place of the AGM. Information is also published in the press, and is available online at www.socgen.com, and via a tollfree number (in France): 0 800 850 820.

Holders of registered shares receive a notice of meeting two weeks before the AGM, including all necessary information and the voting form.

Who can take part in the AGM?

All shareholders whose shares are registered in an account two days before the AGM may attend the meeting. Shareholders who receive a notice of meeting and who wish to attend must request an admission card by checking the relevant box and returning the form. Holders of bearer shares must contact their authorized financial intermediary to request a notice of meeting and an admission card or proof that their shares are not available for sale. This certificate is transmitted to Société Générale automatically when holders of bearer shares return the duly completed and signed voting form to their intermediary. If a shareholder does not receive an admission card prior to the meeting, he or she may still attend, on presentation of proof that their shares are not available for sale.

How does the vote take place?

For shareholders present at the AGM, votes are cast during the meeting using an electronic voting box, which is distributed to attendees once they sign the attendance register.

Shareholders who wish to vote without attending the meeting in person can either submit a postal vote, appoint their spouse to act as proxy, or delegate their vote to the chairman, by returning the voting form included in the notice of meeting.

Internet

The AGM is webcast live and is available as a recording online at www.socgen.com

SHAREHOLDERS' DIARY 2005

FEBRUARY 10 Group results for 2004 MARCH 10 Publication of 2004 accounts under IFRS MAY 9 Annual General Meeting of Shareholders MAY 25 Group results for the first quarter 2005

MAY 30 Dividend payment date AUGUST 4 Group results for the second quarter 2005 NOVEMBER 17 Group results for the third quarter 2005

Yves Aubry

Born 1939 in Noirmoutier, France Erosion**, 1977** Cibachrome photograph 55 x 81 cm

Corporate Governance

Information on corporate governance

Chairman's Report

Board of Directors

Société Générale is a Société Anonyme (French limited liability corporation) managed by a Board of Directors. In April 2003, the Board of Directors upheld the Group's monistic management structure, considering it the most suitable option for the Company in its current position. Under this structure, the Chairman, Daniel Bouton, also carries out the functions of Chief Executive Officer and is assisted by Philippe Citerne in the capacity of Chief Executive Officer.

The by-laws provide for no particular limitations to the powers of the chief executive officers, who exercise their functions in accordance with the laws and regulations in force, the Company's by-laws and internal rules, and the guidelines set by the Board of Directors.

Directors

The Group's directors hold a significant number of shares personally: although the statutory minimum is 200 shares, the Directors' Charter recommends that each director appointed by shareholders hold at least 600 Société Générale shares. Over 93% of directors comply with this recommendation.

As provided for in the internal rules of the Board, half of directors' attendance fees are paid in proportion to attendance at Board or Committee meetings (see page 35).

The Directors' Charter stipulates that directors of Société Générale should abstain from carrying out transactions on securities issued by companies about which they have access to inside information. Like Group employees with access to privileged information, directors are prohibited from conducting transactions in Société Générale shares during the thirty days prior to the publication of results, and from carrying out speculative trading in Société Générale shares (shares must be held for at least two months, options trading is banned).

The Directors' Charter was modified in January 2005 to extend this rule to transactions involving securities of listed subsidiaries of Société Générale.

Directors must inform Société Générale of any transactions they or persons close to them have carried out on Société Générale shares. Until the publication of the general regulations of the Autorité des marchés financiers (French Securities Regulator) at the end of November 2004, this information was only submitted twice a year (in the first and second half), and then passed on to the AMF for publication. Under the new general regulations, Directors must inform Société Générale immediately of any transaction carried out on the Company's securities. This information is then passed on to the AMF for publication.

Duties and powers of the Board

The Board of Directors determines the Company's strategy and ensures its implementation. The Board's internal rules stipulate that it must regularly examine the Group's strategy and deliberate ex ante on changes to the Group's management structure and on transactions – in particular acquisitions and disposals – that are liable to have a significant impact on the Group's earnings, the structure of its balance sheet or its risk profile.

Since 2003, the internal rules have clearly stated the rules applicable in cases where the Board of Directors gives its prior approval to investment projects or more general strategic transactions (see article 1 of the internal rules).

CORPORATE GOVERNANCE

Société Générale implements the recommendations given in the AFEP-MEDEF (1) reports of September 2002 on the corporate governance of listed companies.

In September 1995, three committees (Audit Committee, Compensation Committee and Nomination Committee) were set up. Since early 2000, the Board of Directors and the Committees have been governed by internal rules. A Directors' Charter lays out the compliance rules applicable to the Directors of Société Générale.

The internal rules and the Directors' Charter, together with

(1) Association Française des Entreprises privées (Association of French Private Sector Companies) and Mouvement des Entreprises de France (French Business Confederation).

The Board is informed of and regularly discusses Group policy with respect to human resources, information systems and organization.

The Board sets the remuneration of the chief executive officers and decides on the implementation of stock option plans in accordance with the authorization granted by the General Meeting.

Functioning of the Board

Internal rules govern how the Board of Directors operates. The Board is convened by the Chairman or at the request of one-third of Board members. At least five meetings are scheduled each year, notably to approve the parent company and consolidated financial statements.

At least once a year, one item on the agenda is devoted to appraising the Board's performance. Similarly, the Board also deliberates at least once a year on the risks to which the Company is exposed. Where appropriate, the Board's opinion is published in press releases issued following its meetings.

Each director receives the information necessary to carry out his or her mission, notably with a view to preparing each Board meeting. In addition, directors receive any pertinent information – including that of a critical nature – on significant events affecting the Company.

Each director receives the necessary training to fulfill his or her mandate. As such, in 2004, Mr Cicurel was provided with additional training on Retail Banking activities.

Activity report of the Board of Directors

The Board of Directors met nine times in 2004, with the meetings lasting an average of three hours. The attendance rate of directors was 84%, compared with 82% in 2003 and 79% in 2002.

The Board approved the annual, half-yearly and quarterly results. The Board also made a number of new appointments to its committees. On April 20, Mr Wyand was appointed Chairman of the Audit Committee to replace Mr Calvet, and Ms Lulin and Mr Cohen were appointed members. On November 8, Mr Cicurel was appointed to the Nomination and Compensation Committees. The Board also deliberated on a number of acquisitions and disposals in accordance with its internal rules. It approved the disposal of Société Générale's holding in Sophia, and was informed of the disposal of the Group's Argentinian retail banking subsidiary and of the acquisitions of General Bank of Greece and Hanseatic Bank (Germany). It also discussed the Group's growth strategy in Asia.

The Board carried out a review of the Group's strategy for its Retail Banking arm, and was presented with the Group's policy for human resources and communications. It also assessed the balance sheet of recent acquisitions, notably Komercni Banka.

The Board of Directors reviewed the Group's risk exposure and examined the annual reports on internal control and risk management submitted to the Commission bancaire (French Banking Commission) as well as the follow-up letters received from the Banking Commission further to its own audits.

It was presented with the Bank's business continuity plans and was updated on preparations for the adoption of International Accounting Standards (IAS), International Financial Reporting Standards (IFRS), and the future Basel II capital adequacy standards.

It decided to implement a stock option plan and a capital increase reserved for employees as part of the Group's global employee share ownership plan.

Board Committees

The Board's internal rules stipulate that preparatory work for its decisions in certain areas must be carried out by specialized committees composed of directors appointed by the Board. These committees examine matters within their remit and submit their opinions and proposals to the Board for approval. Three such committees have been created: the Audit Committee, the Compensation Committee and the Nomination Committee. The Board may also set up one or more ad hoc committees.

Audit Committee

Since April 20, 2004, the Committee has been composed of four directors, Ms Lulin and Messrs Cannac, Calvet and Wyand, three of whom are independent members. The Committee is chaired by Mr Wyand and is responsible for:

• Reviewing the draft financial statements before they are submitted to the Board, notably verifying how they were prepared and ensuring the relevance and consistency of the accounting principles and methods applied. • Reviewing the choice of meth-

ods and rules used in the preparation of the consolidated accounts.

the Company's by-laws, are included as an appendix to the Annual Report.

This section contains two parts. The first, which covers the work of the Board of Directors, contains the Chairman's report on how the Board prepares and organizes its work (Articles L. 225-37 and L. 225-51 of the French Commercial Code). This report was presented to the Nomination Committee and to the

Board of Directors. The activity reports of each Committee were approved by the Committees themselves. The second part covers the composition of the Board of Directors and its appraisal, and relations with the Statutory Auditors. It was approved by the Board of Directors at its meeting on February 9, 2005, on the advice of the Nomination Committee and the Audit Committee.

• Reviewing the consistency of procedures put in place to ensure proper internal control of operations, risk management and compliance with the corporate ethical policy.

• Managing the process for selecting the Statutory Auditors and providing the Board with an opinion on the appointment or renewal of the Statutory Auditors, as well as on their remuneration.

• Ensuring that the Statutory Auditors remain independent (see "Statutory Auditors", page 27). • Examining the work schedule of the Statutory Auditors.

• Examining the Group's internal audit schedule and the annual report on internal control drawn up in accordance with banking regulations, and formulating an opinion on the organization and functioning of the internal audit departments.

• Examining follow-up letters sent by the French Banking Commission and issuing an opinion on draft responses.

The Statutory Auditors attend meetings of the Audit Committee, unless the Committee decides otherwise.

Activity report of the Audit Committee

The Audit Committee met seven times in 2004, with an attendance rate of 100% (93% in 2003).

At each closing of the accounts, the Audit Committee meets alone with the Statutory Auditors, before hearing the presentation of the accounts by the Chief Financial Officer and comments by the Head of Group Risk Management and the Corporate Secretary on all matters pertaining to risks. Since 2002, one of the chief executive officers attends part of the meetings called to approve the accounts and discusses the highlights of the quarter with the Committee. More in-depth presentations are given by other managers on certain subjects, notably the principal risks, asset/ liability management, internal control and the financial aspects of planned acquisitions.

In 2004, the Committee reviewed the draft annual, half-yearly and quarterly consolidated financial statements before their presentation to the Board, and submitted its opinion on these statements to the Board. In particular, it checked the adequacy of provisioning in relation to the principal identified risks, as well as the methods and level of provisioning of the investment portfolios. It closely monitored operating expenses, as well as the main credit, market and legal risks and the main balance sheet and offbalance sheet items.

It examined the report on internal control, the report on risk assessment and monitoring procedures submitted to the French Banking Commission, the compliance report submitted to the Chairman, the internal audit schedule and plans to improve internal audit and risk management.

It was also consulted on draft responses made by the Group to follow-up letters from the French Banking Commission.

The Committee discussed the Statutory Auditors' work schedule and budget for 2004.

The Committee reviewed the procedures used to control certain market risks and was consulted on the annual revision of limits set in this respect.

The Audit Committee was updated on the preparations made for the adoption of IAS and Basel II and the potential consequences for the Bank. It also examined the Group's fiscal policy.

It issued an opinion on the financial aspects of Komercni Banka's balance sheet and on the indicators used to monitor acquisitions. It was presented with the strategy and results of its corporate and investment banking activities in the United States.

Lastly, the Committee examined the derogations to the internal rules granted for missions liable to be entrusted to the Statutory Auditors.

Compensation Committee

Made up of four independent directors, Messrs Baird, Cicurel (as of November 8, 2004), Jeancourt-Galignani and Ricard and chaired by Mr Jeancourt-Galignani, the Compensation Committee:

• Draws up and submits to the Board the criteria for determining the remuneration of the chief executive officers, including benefits in kind, insurance and pension benefits, as well as any compensation received from Group companies; it ensures these criteria are properly applied, in particular the rules governing performance-linked bonuses.

• Advises the Board on the policy for awarding stock options, and formulates an opinion on the list of beneficiaries.

• Is kept informed of the Group's compensation policy, in particular that applicable to senior managers.

• Prepares the annual appraisal of the chief executive officers and meets with the Group's outside directors to discuss these appraisals.

• Prepares Board decisions regarding employee savings schemes.

SOCIÉTÉ GÉNÉRALE GROUP - 2004 ANNUAL REPORT

Activity report of

the Compensation Committee The Compensation Committee met five times in 2004, with an attendance rate of 69%, compared with 92% in 2003. This fall in attendance is due to the absence of Mr Baird who was unable to attend the Committee meetings in 2004.

During its meetings, the Compensation Committee prepared the method to be used by the Board to determine the variable portion of the chief executive officers' compensation and also proposed a change to the fixed remuneration of the Chief Executive Officer. The Committee was informed of the remuneration of the members of the Executive Committee (see "Senior management remuneration policy", page 34).

The Committee prepared the appraisal of the chief executive officers and discussed it with the Group's other outside directors before submitting a report to the Chairman and the Board.

It also reviewed the terms of the capital increase reserved for employees.

Lastly, the Committee also examined the consequences of the new IFRS 2 on the accounting treatment of stock option plans in the consolidated financial statements.

It made a proposal to the Board concerning a stock option plan (see "Stock option plans", page 36).

Nomination Committee

The Nomination Committee is composed of the Chairman of the Board and the members of the Compensation Committee. It is chaired by the Chairman of the Compensation Committee and makes proposals to the Board for the appointment of new Board members and for the replacement of chief executive officers, especially in the case of an unexpected vacancy.

The Nomination Committee prepares the Board of Directors' review of issues pertaining to corporate governance. It carries out the appraisal of the Board of Directors. It submits proposals to the Board of Directors concerning the presentation of Board members in the Annual Report, notably as regards the list of independent directors. It makes proposals to the Board regarding its composition, after carrying out any necessary inquiries. The Nomination Committee is informed prior to the appointment of any member of the Group's Executive Committee and any head of a corporate department who does not sit on this Committee. It is informed of the list of replacements for these senior managers.

Activity report of the Nomination Committee

The Nomination Committee met five times in 2004, with an attendance rate of 76% (93.75% in 2003) due to the absence of Mr Baird.

It prepared the Board's review of the corporate governance section of the 2003 Annual Report, in particular that part concerning the assessment of directors' independence (see below). It made a proposal to the Board concerning the nominations of directors submitted to the 2004 General Meeting and prepared the proposals for the 2005 General Meeting.

In addition, the Committee discussed the optimum size of the Board of Directors and methods of employee representation and prepared the proposals to be put to the General Meeting by the Board on this issue.

Lastly, the Committee prepared the appraisal of the Board of Directors (see below). It reviewed the list of replacements for the chief executive officers and is ready to submit its proposals to the Board if so required.

It was presented with the list of replacements for the heads of the Group's divisions.

Activity report of the Board of Directors

Composition (at December 31, 2004)

The Board of Directors has seventeen members (one woman and sixteen men), three of whom are representatives elected by employees. Four directors are non-French nationals. The average age of directors is 60. In 2004, the composition of the Board changed as follows:

• Expiry of the mandate of Mr Calvet at the General Meeting of April 29, 2004.

• Appointment by the General Meeting of Mr Cicurel to replace Mr Calvet.

• Ratification of the appointment of Mr Azéma.

• Renewal by the General Meeting of the mandates of Messrs Baird, Citerne and Jeancourt-Galignani.

In accordance with the recommendations of the AFEP-MEDEF reports, the Board of Directors, on the basis of the report of its Nomination Committee, examined the independence of each of its members at December 31, 2004 against the criteria set out in the aforementioned report. In particular, it examined the banking relations between the Group and the companies that its directors manage, with a view to determining whether these relationships were of such nature and importance as to color the directors' judgment. This analysis was based on a thorough examination that factored in a number of criteria, including the company's overall debt level and liquidity, the ratio of bank loans to total debt, Société Générale's total exposure and the ratio of this exposure to total bank loans, other commercial relations, etc. The Board of Directors also analyzed the situation of those Directors with ties to groups that hold Société Générale shares.

On the basis of these criteria, the Board of Directors considered that Ms. Lulin, Messrs Azéma, Baird, Cannac, Cicurel, Cohen, Jeancourt-Galignani and Ricard, and Meiji Yasuda Life should be regarded as independent directors.

Meiji Yasuda Life has been a director for over twelve years. However, while the AFEP-MEDEF report stipulates that independent directors must not remain on the Board for more than 12 years, this limit had not been reached on the date when the mandate of this director was last renewed and hence Meiji Yasuda Life does not lose its status as independent director until expiry of its current mandate.

Mr Ricard is also considered an independent director since the banking relations between the group he chairs and Société Générale are not of a nature to impair his judgment, and the cross-holdings between the two groups were unwound at the end of 2002. Pernod Ricard has not held any shares in Société Générale since 2003.

Mr Azéma, Groupama's Chief Executive Officer, is considered an independent director since Groupama holds substantively less than 10% of Société Générale's capital, and neither the banking relations between Groupama and Société Générale nor the partnership set up between the two Groups to launch Groupama Banque are liable to color his judgment, given the limited impact of this project for both groups.

Mr Cicurel, Chairman of the Management Board of Compagnie Financière Edmond de Rothschild, is considered an independent director since there are no economic ties between the company he manages and Société Générale.

The other directors are not considered independent under the criteria given in the AFEP-MEDEF report, either because they are managers or employees of the Group or because they have been directors for over twelve years (Messrs Viénot and Wyand).

Therefore, nine out of the seventeen directors are independent (i.e. 53% of the Board of Directors and 64% of directors appointed by the General Meeting).

This situation is in line with the Board's aim of ensuring that half of all directors are independent, as recommended in the AFEP-MEDEF report of September 2002, as and when mandates expire.

It is also in line with the Board's aim of ensuring a well-balanced and diversified mix of competencies among the directors, and reconciling continuity with a process of gradual renewal.

Three directors are elected to the Board by employees for a period of three years. These were elected in 2003.

In 2000, the General Meeting of Shareholders approved the reduction in the term of directors' new mandates to four years (instead of six years), which now enables a quarter of the directors' mandates awarded by the General Meeting to be renewed each year (directors representing employees are appointed by election every three years).

Appraisal of the Board of Directors

The Board of Directors carried out its second performance selfappraisal during the autumn of 2002, following that carried out in 2000. This appraisal was organized with the assistance of an external consultancy firm, which interviewed all Board members – both one-on-one and using a detailed questionnaire approved by the Nomination Committee – to ascertain their views on how the Board operates and their suggestions for improvements. On the basis of this appraisal, a number of changes were made to the operation of the Board at the start of 2003, some of which gave rise to amendments to the internal rules and Director's Charter.

In 2004, the Nomination Committee drew up an appraisal questionnaire focusing in particular on the progress made in relation to the previous appraisal. This document was submitted to the directors. The Board deliberated on the conclusions drawn from the responses to this questionnaire. The main points highlighted were the need for regular presentations on the Group's human resources policy and information systems, the need for specific training on risk exposure and the benefits of more frequent meetings between the heads of the divisions and business lines.

As in 2003, the Compensation Committee carried out an appraisal of the chief executive officers. This appraisal was preceded by a specific meeting with the Group's outside directors.

Statutory auditors

The accounts of Société Générale are certified jointly by Ernst & Young Audit, represented by Mr Christian Mouillon, and Deloitte & Associés (Deloitte Touche Tohmatsu until October

2004), represented by Mr José Luis Garcia. Their mandates end upon closing of the 2005 financial statements.

In 2003, Deloitte took over from Barbier Frinault & Autres (formerly Andersen), which resigned its mandate. In order to select a replacement, the Board of Directors asked the Audit Committee to organize a call for tenders in 2002. The Committee approved the terms of the invitation to tender and the choice of the four audit firms invited to bid. It reviewed the conclusions submitted by an internal committee formed to analyze the bids and, after interviewing the candidates, selected Deloitte.

In 2001, with a view to reinforcing the independence of the Company's Statutory Auditors, the Board decided to limit the fees paid to the networks of the Statutory Auditors for non-audit work. In 2002, the Board adopted stricter rules distinguishing between the various types of mission that may be entrusted to external auditors and the networks to which they belong.

Article 104 of the French law on financial security dated August 1, 2003 amended the legislation governing the independence of Statutory Auditors. It prohibits Statutory Auditors from providing services other than audit services and restricts the services that can be provided by the networks to which the Statutory Auditors belong.

The Board meeting held on November 5, 2003 noted these changes and adopted the new rules governing the relations between Group companies and their Statutory Auditors.

These rules may be amended as the law comes into force, notably in line with any decisions taken by the Haut Conseil du Commissariat aux comptes (French High Council of Auditors) introduced under this law.

As such, Ernst & Young and Deloitte & Associés may only provide statutory auditing services to:

• Société Générale,
• Its subsidiaries.

Any assignment that does not fall within this scope, as stipulated by the French High Council of Auditors, is therefore excluded. The law does not prohibit the Statutory Auditors and the networks to which they belong from supplying services to Group companies that are not audited by them. The Board of Directors has nevertheless approved stricter rules, whereby these services may only be offered outside France and after receiving the express authorization of the Audit Committee.

The Statutory Auditors declare the fees earned for their work each year. A report is submitted to the Audit Committee each year on the way in which the aforementioned rules are applied, with details of the fees paid for each type of assignment to the networks to which the Statutory Auditors belong.

FEES PAID TO STATUTORY AUDITORS IN 2004

	Deloitte & Associés		Ernst & Young Audit		Total fees in 2004
(In thousands of euros, before tax)	Amount	%	Amount	%	Amount	%
Audit
Statutory audit, certification, examinationof individual and consolidated accounts	7,676		9,922		17,598
Related assignments	2,008		2,065		4,073
Sub-total	9,684	99%	11,987	94%	21,671	96%
Other services
Legal, tax, social	63		292		356
Information technology	–		45		45
Internal audit	–		–		–
Other	68		391		459
Sub-total	131	1%	728	6%	859	4%
Total	9,815	100%	12,715	100%	22,530	100%

Board of Directors

at December 31, 2004

Daniel Bouton

Date of birth: April 10, 1950 Chairman and Chief Executive Officer of Société Générale Member of the Nomination Committee - Holds 47,772 shares

Year of first appointment: 1997 – Year in which current mandate will expire: 2007

Other directorships in listed companies:

Director: Schneider Electric SA, Total SA, Véolia Environnement. Biography: Budget Director at the Ministry of Finance (1988-1990). Joined Société Générale in 1991. Appointed Chief Executive Officer in 1993. Chairman and Chief Executive Officer since November 1997.

Philippe Citerne

Date of birth: April 14, 1949 Chief Executive Officer of Société Générale Holds 62,700 shares

Year of first appointment: 2001 - Year in which current mandate will expire: 2008

Other directorships in listed companies:

Director: Unicredito Italiano Spa - Member of Supervisory Board: Sopra Group – Permanent representative of Société Générale on the Board of Directors: Accor. Biography: After a career at the Ministry of Finance, he joined Société Générale in 1979. Head of Economic Research in 1984, Chief Financial Officer in 1986, Senior Executive Vice-President, Human Relations in 1990. Appointed Deputy Chief Executive Officer in 1995. Chief Executive Officer since November 1997.

Marc Viénot (1)

Date of birth: November 1, 1928 Honorary Chairman of Société Générale Holds 38,736 shares

Year of first appointment: 1986 - Year in which current mandate will expire: 2007

Other directorships in listed companies:

Director: Alcatel, Ciments Français - Member of Supervisory Board: Barrière Group. Biography: After a career at the French Treasury, he joined Société Générale in 1973. Chief Executive Officer in 1977. Chairman from 1986 to 1997.

Jean Azéma Date of birth: February 23, 1953 Chief Executive Officer of Groupama

Independent director (2) - Holds 600 shares Year of first appointment: 2003 - Year in which current mandate will expire: 2005

Other directorships in listed companies:

Director: Médiobanca, Veolia Environnement – Permanent representative of Groupama SA on the Board of Directors: Bolloré Investissement.

Biography: Joined the Groupama group in 1975. Appointed Chief Financial Officer of Groupama Vie in 1987 and Chief Executive Officer of Groupama in 2000.

Euan Baird Date of birth: September 16, 1937 Company Director

Independent director (2) – Member of the Nomination Committee and the Compensation Committee – Holds 600 shares Year of first appointment: 2001 - Year in which current mandate will expire: 2008

Other directorships in listed companies:

Director: Scottish Power, Areva. Biography: British national. Joined the Schlumberger group in 1960, where he became Deputy Chief Executive of wireline operations in 1979. Chairman of Schlumberger from 1986 to 2003. Chairman of Rolls-Royce from 2003 to June 2004.

Yves Cannac Date of birth: March 23, 1935

Member of the Conseil économique et social (French government advisory committee)

Independent director (2) – Member of the Audit Committee Holds 700 shares

Year of first appointment: 1997 - Year in which current mandate will expire: 2006

Other directorships in listed companies:

Director: AGF – Member of Supervisory Board: Solving International. Biography: Member of the Conseil d'État from 1965 to 1985. Chairman of Havas from 1978 to 1981. Chairman of Cegos from 1985 to 1999.

Directorships in unlisted joint-stock companies held during 2004

Philippe Citerne

Chairman: Systèmes Technologiques d'Echange et de traitement (STET). Director: Crédit du Nord, Généval, Grosvenor Continental Europe, SG Hambros Bank and Trust Ltd, Trust Company of the West TCW Group.

Marc Viénot

Member of Supervisory Board: Société Générale Marocaine de Banque.

Jean Azéma

Chief Executive Officer: Groupama Holding, Groupama Holding 2.

Yves Cannac

Director: Caisse des Dépôts Développement.

CORPORATE GOVERNANCE BOARD OF DIRECTORS 28_29

Michel Cicurel

Date of birth: September 5, 1947

Chairman of the Management Board of Compagnie Financière Edmond de Rothschild and Compagnie Financière Saint-Honoré

Independent director (2) – Member of the Nomination Committee and the Compensation Committee since December 20, 2004 Holds 600 shares

Year of first appointment: 2004 - Year in which current mandate will expire: 2008

Other directorships in listed companies:

Member of Supervisory Board: Publicis. Biography: After a career in the French Treasury from 1973 to 1982, he was appointed Project Director and subsequently Deputy Chief Executive Officer of Compagnie Bancaire from 1983 to 1988 and Cortal from 1983 to 1989. Deputy director of Galbani (BSN group) from 1989 to 1991. Director and Chief Executive Officer, and subsequently Vice-Chairman and Chief Executive Officer of Cerus from 1991 to 1999.

Elie Cohen

Date of birth: December 8, 1946

Professor at the Université de Paris-Dauphine

Independent director (2) – Member of the Audit Committee since April 20, 2004 - Holds 600 shares

Year of first appointment: 2003 - Year in which current mandate will expire: 2006

Biography: Professor in Management, PhD in economics, Professor at Paris-Dauphine, President of the Université de Paris-Dauphine (1994 to 1999).

Antoine Jeancourt-Galignani Date of birth: January 12, 1937 Chairman of Gecina

Independent director (2) – Chairman of the Nomination Committee and the Compensation Committee - Holds 1,064 shares Year of first appointment: 1994 - Year in which current mandate will expire: 2008

Other directorships in listed companies:

Director: AGF, Total SA, Kaufman et Broad – Chairman of Supervisory Board: Euro Disney Sca.

Biography: Deputy Chief Executive of Crédit Agricole from 1973 to 1979. Appointed Chief Executive Officer of Banque Indosuez in 1979 and Chairman from 1988 to 1994. Chairman of AGF from 1994 to 2001. Chairman of Gecina since June 2001.

Elisabeth Lulin Date of birth: May 8, 1966

Founder and CEO of Paradigmes et Caetera

(company specialized in benchmarking and public policy forecasting) Independent director (2) – Member of the Audit Committee since April 20, 2004 - Holds 700 shares

Year of first appointment: 2003 - Year in which current mandate will expire: 2005

Biography: After a career at the Ministry of Finance (1991-1996), project manager for Edouard Balladur and subsequently technical advisor to Alain Juppé (1994-1995). Appointed head of the external communication unit at INSEE (1996-1998). CEO of Paradigmes et caetera since 1998.

Robert A. Day (3) Date of birth: December 11, 1943

Chairman and Chief Executive Officer TCW Group Inc. Holds 2,104,717 shares

Year of first appointment: 2002 - Year in which current mandate will expire: 2006

Other directorships in listed companies: Director: Freeport

Biography: US national. Attended Robert Louis Stevenson School (1961). Graduated from Claremont Mc Kenna College with a BSc Economics (1965). Portfolio manager for White, Weld & Co. investment bank in New York (1965). Founded Trust Company of the West (TCW) in 1971.

(1) Former Chief Executive Officer. (2) See pages 25 and 26. (3) Chief executive officer of a subsidiary of Société Générale Group.

Robert A. Day

Chairman: Oakmont Corporation Director: Freeport-McMohan Copper and Gold Inc, MacMohan Exploration Cy, Syntroleum Corporation, Synta Pharmaceuticals, Fisher Scientific Inc.

Michel Cicurel

Chairman of Supervisory Board: Edmond de Rothschild Private Equity Partners SAS. Chairman of Board of Directors: ERS, Edmond de Rothschild SGR Spa (Italy), Edmond de Rothschild SIM Spa (Italy).

Director: Banque Privée Edmond de Rothschild (Geneva), Edmond de Rothschild Limited (London),

La Compagnie Financière Holding Edmond et Benjamin de Rothschild (Geneva), La Compagnie de Trésorerie Benjamin de Rothschild (Geneva), Cdb Web Tech (Italy), Cir International (Luxembourg), Rexecode. Non-voting director: Paris-Orléans. Member of the Council of Sponsors: Rothschild & Compagnie Banque. Permanent representative of Compagnie Financière Saint-Honoré: Cogifrance. Permanent representative of Compagnie Financière Edmond de Rothschild Banque: Assurances et Conseils Saint-Honoré, Edmond de Rothschild Corporate Finance, Edmond de Rothschild Asset Management, Edmond de Rothschild Financial Services, Edmond de Rothschild Multi Management, Equity Vision.

SOCIÉTÉ GÉNÉRALE GROUP - 2004 ANNUAL REPORT

Board of Directors

Meiji Yasuda Life Insurance Cy Mutual life insurance company

Independent director (2) – Holds 11,069,312 shares Represented by Kenjiro Hata Date of birth: July 27, 1928

Senior Corporate Advisor Meiji Yasuda Life Insurance Company Year of first appointment: 1988 - Year in which current mandate will expire: 2005

Other directorships in listed companies:

Director: Kirin Brewery Co. Ltd – Corporate Auditor: Chubu Electric Power Ltd, Mitsubishi Estate Co. Ltd.

Biography: Japanese national. Joined Meiji Life group in 1954. Chairman in 1998 and Senior Corporate Advisor of Meiji Life (now Meiji Yasuda Life) since July 2, 2003.

Patrick Ricard Date of birth: May 12, 1945

Chairman and Chief Executive Officer of Pernod-Ricard

Independent director (2) – Member of the Nomination Committee and the Compensation Committee - Holds 200 shares Year of first appointment: 1994 - Year in which current mandate will expire: 2005

Other directorships in listed companies: Director: Provimi, Altadis. Biography: Joined Pernod-Ricard group in 1967. Chairman since 1978.

Gérard Baude Date of birth: November 1, 1947 Employee in Means of Payment department, Aix-en-Provence branch

Director elected by employees – Holds 240 shares Year of first appointment: 1993 - Year in which current mandate will expire: 2006

Biography: Société Générale employee since 1968.

Philippe Pruvost Date of birth: March 2, 1949 Asset manager advisor, Annemasse branch

Director elected by employees - Holds 3,000 shares Year of first appointment: 2000 - Year in which current mandate will expire: 2006

Biography: Société Générale employee since 1971.

Anthony Wyand

Date of birth: November 24, 1943 Company Director

Chairman of Audit Committee since April 20, 2004 Holds 1,000 shares

Year of first appointment: 2002 - Year in which current mandate will expire: 2007

Other directorships in listed companies:

Director: Unicredito Italiano Spa, Société Foncière Lyonnaise. Biography: British national. Joined Commercial Union in 1971. Executive Director of Aviva until June 2003.

Marc Sonnet Date of birth: October 16, 1947 Head of employee relations, Aix-en-Provence Director elected by employees - Holds 200 shares Year of first appointment: 2003 - Year in which current mandate will expire: 2006

Biography: Société Générale employee since 1973.

Directorships in unlisted joint-stock companies held during 2004

Kenjiro Hata

Corporate Auditor: The Hokkoku Bank Ltd, Shin Estu Polymer Co Ltd, Daido Steel Co Ltd.

Antoine Jeancourt-Galignani

Chairman of the Board of Directors (nonexecutive): SNA Group Lebanon. Member of Supervisory Board: Jetix Europe NV, Hypo Real Estate Holding AG. Elisabeth Lulin Director: Doma viva SA.

Patrick Ricard

Chairman of the Board of Directors: Comrie plc. Chairman and Chief Executive Officer: World Brands Duty Free Ltd. Chairman: Austin Nichols Export Sales Inc. Member of Supervisory Board: Wyborowa SA. Director: PR Finance SA, Société Paul Ricard, Martell & Co SA, Chivas Brothers

Directors whose mandate is proposed for renewal by the General Meeting of shareholders

Jean Azéma

Date of birth: February 23, 1953 Chief Executive Officer of Groupama

Independent Director - Holds 600 shares

Year of first appointment: 2003 - Year in which current mandate will expire: 2005 Biography: see page 28.

Elisabeth Lulin

Date of birth: May 8, 1966

Founder and CEO of Paradigmes et Caetera (company specialized in benchmarking and public policy forecasting) Independent Director – Member of the Audit Committee since April 20, 2004 - Holds 700 shares Year of first appointment: 2003 - Year in which current mandate will expire: 2005 Biography: see page 29.

Patrick Ricard Date of birth: May 12, 1945

Chairman and Chief Executive Officer of Pernod-Ricard Independent Director – Member of the Nomination Committee and the Compensation Committee - Holds 200 shares Year of first appointment: 1994 - Year in which current mandate will expire: 2005 Biography: see page 30.

Ltd, The Glenlivet Distillers Ltd, Aberlour Glenlivet Distillery Ltd, Boulevard Export Sales Inc., Peribel SA, Distillerie Fratelli Ramazzotti Spa, Duncan Fraser and Company Ltd, Glenforres Glenlivet Distillery Ltd, House of Campbell Ltd, Irish Distillers Group Ltd, Larios Pernod Ricard SA, Muir Mackenzie Ad Company Ltd, Pernod Ricard Swiss SA, Polairen Trading Ltd, Sankaty Trading Ltd, Peri Mauritius

Ltd, Populus Trading Ltd, White Heather Distillers Ltd, W. Whiteley and Company Ltd, PR acquisitions II Corp, William Whiteley & Co Inc. Vice-Chairman of the Board of Directors: Austin Nichols and Co Inc. Permanent representative of Pernod-Ricard on the Board of Directors: Cusenier SA, JFA SA, Pernod-Ricard Europe SA, Pernod SA, Ricard SA, Santa Lina SA,

Campbell Distillers Ltd, Ets Vinicoles Champenois (EVC) Galibert et Varon. Permanent representative of Santa Lina on the Board of Directors: Cie Financière des Produits Orangina (CFPO) SA, Société Immobilière et Financière pour l'alimentation (SIFA) SA Permanent representative of International Cognac Holding on the Board of Directors: Renault Bisquit SA

Anthony Wyand

Holding Ltd.

Chairman: Grosvenor Continental Europe SAS. Director: Adyal, Aviva Participations. Permanent representative: Aviva Spain, CU Italia. Member of Supervisory Board: Aviva France. Non-Executive Director: Grosvenor Group

Executive committee

Mission: Ensure the strategic management of the Group under the authority of the Chairman and Chief Executive Officer.

Daniel Bouton (1) Chairman and Chief Executive Officer

Philippe Citerne (2) Chief Executive Officer

Didier Alix (5) Chief Executive Officer of Retail Banking

Jean-Pierre Mustier (8) Chief Executive Officer, SG Corporate and Investment Banking

Philippe Collas (9) Chief Executive Officer, SG Global Investment Management and Services

Alain Py (7) Chairman and Chief Executive Officer, Crédit du Nord

Frédéric Oudéa (4) Senior Executive Vice-President, Group Chief Financial Officer

Christian Schricke (3) Senior Executive Vice-President, Corporate Secretary

Bernard de Talancé (6) Senior Executive Vice President, Corporate Resources and Human Relations

Participate in meetings of the Executive Committee for subjects within their domain:

René Querret Senior Executive Vice-President, Group Chief Information Officer Hervé Saint-Sauveur

Senior Advisor to the Chairman and Chief Executive Officer

Attend meetings of the Executive Committee:

Didier Hauguel Head of Group Risk Management Hugues Le Bret Head of Group Communications

Group Management Committee at February 28, 2005

Mission: Discuss Group strategy and other issues of general interest to the Group

Daniel Bouton Philippe Citerne Didier Alix Jean-Pierre Mustier Philippe Collas Alain Py Frédéric Oudéa Christian Schricke Bernard de Talancé

Head of Investment Banking for Mid Caps

Aulagnon Chief Executive, Global Investment Banking Division Europe

Beaufils Chief Executive Officer, Crédit du Nord

Deputy CEO, SG Corporate and Investment Banking

Global Head of Securities Services for Investors

Management

Douzou Deputy Head of Retail Banking Société Générale France

Head of Information Systems of Retail Banking Société Générale

Chief Financial Officer, SG Corporate and Investment Banking

Jean-Louis Mattei Head of International Retail Banking

Ottenwaelter Deputy Global Head of Corporates and Institutions, SG Corporate and Investment Banking

Poirier Head of Strategy and Marketing, Retail Banking

Senior Executive Vice-President, Group Chief Information Officer

Saint-Sauveur Senior Advisor to the Chairman and Chief Executive Officer

Sammarcelli Head of Retail Banking Société Générale France

Patrick Soulard Deputy CEO, SG Corporate and

Théry Chief Operating Officer, Global Securities Services for Investors

Chief Operating Officer, SG Corporate and Investment Banking

Remuneration of senior managers

Senior management remuneration policy

Chairman and chief executive officers

The Board of Directors, based on a proposal made by the Compensation Committee, determines the remuneration of the two chief executive officers as follows:

• a basic salary, which may be revised in line with market practices;

• an annual performance-linked bonus, equivalent to the percentage of the basic salary set annually by the Board of Directors when closing the Group's annual accounts. Since 2002, the Board of Directors has set this performance-linked bonus based on two elements:

– First, targets linked to earnings per share (EPS), which are set in absolute value terms for the coming financial year. The bonus tied to this indicator can vary between 0% and 150% of the basic salary, with this ceiling and floor corresponding to the maximum and minimum EPS targets and a rate of 75% corresponding to the central EPS target. Each year, the Board makes sure that structural effects or exceptional profits and losses do not distort the calculation formula, and that the amount of the performance-linked bonus properly reflects the growth in the Group's profits;

– Second, qualitative indicators based on key objectives underpinning the success of the Company's strategy and set ahead of the coming financial year to which they apply. The bonus linked to this indicator can vary between 0% and 100% of the basic salary, with a rate of 75% being paid when the objectives are met. The performance-linked bonus paid to the Company's chief executive officers is then reduced by the amount of attendance fees paid to them by Société Générale or by companies outside the Group of which they are directors.

The basic salary paid to the Chief Executive Officer was equal to 55% of that received by the Chairman but has been increased to 60% since July 1, 2004. The rate of 55% continues to apply to the performance-linked bonus. Messrs Bouton and Citerne benefit from a Company supplementary pension plan for senior Group managers, in which the only specific element related to their role as chief executive officers is the inclusion in pensionable earnings of a variable component, over and above the basic salary, set at the time of their appointment and equal to 60% of their basic salary. The chief executive officers have a company car.

Messrs Bouton and Citerne do not benefit from any provision for compensation in the event that they are required to step down from their position as chief executive officers. As they had an employment contract prior to their appointment, which was suspended during their term of office, they would benefit from the compensation provided for therein in the event of a unilateral decision to terminate their contract.

Other members of the Executive Committee

For the Chairman of Crédit du Nord, the process is identical to that applied to Messrs Bouton and Citerne, with the Board of Directors setting the basic salary and the performance-linked bonus, based on a proposal made by the Compensation Committee. The performancelinked bonus is directly linked to the company's performance.

The remuneration of the other members of the Executive Committee (1), which is set by the chief executive officers, also comprises two parts:

• a basic salary, determined according to each member's responsibilities and taking into account market practices;

• a performance-linked bonus, set at the discretion of the chief executive officers, which depends on both the Group's results and the individual performances over the previous financial year.

Besides this remuneration, these senior managers also benefit from the general incentive schemes established under the Company's collective agreements, like all employees. They do not receive any attendance fees for their directorships within or outside the Group, with any such fees being paid to Société Générale.

The members of the Executive Committee have a company car.

(1) The Executive Committee comprises the Chairman, the Chief Executive Officer, the three Chief Executive Officers of the Retail Banking and Financial Services, Corporate and Investment Banking and Global Investment Management and Services divisions, the Chairman of Crédit du Nord, the Senior Executive Vice-President in charge of Finance and Corporate Planning, the Senior Executive Vice-President in charge of Corporate Resources and Human Relations, and the Senior Executive Vice-President in charge of the Corporate Secretariat.

REMUNERATION PAID FOR 2004

The basic salary paid to the Chairman has remained unchanged since 2001. As regards the performance-linked bonus, the Board of Directors set the part corresponding to the EPS targets based on the 2004 results and the part corresponding to qualitative performance criteria based on an assessment of these criteria, following a proposal by the Compensation Committee. The total performance-linked bonus thus stood at EUR 2.10 million for the Chairman and EUR 1.15 million for the Chief Executive Officer.

TOTAL REMUNERATION PAID FOR 2004

In millions of euros	Basic salary	Performance-linkedbonus	Total remuneration (1)(including attendance fees)	Total remuneration paidby Group (1)
Chairman	1.00	2.10	3.10	2.94
Chief Executive Officer	0.58	1.15	1.73	1.67
7 other members of the Executive Committee	2.04	8.05	10.09	10.09

(1) The total remuneration corresponds to the sum of basic salaries paid in 2004 and the performance-linked bonuses relating to the 2004 financial year paid in March 2005. The total remuneration paid by the Group excludes the attendance fees paid to the chief executive officers by

companies outside the Group, which amounted to EUR 159,000 for the Chairman and EUR 61,000 for the Chief Executive Officer.

CHANGE IN REMUNERATION OF SENIOR OFFICERS SINCE 2001

			2001				2002				2003				2004
RemunerationsIn millions of euros	Basic	PLB(1)	Total	o.w. SG(2)	Basic	PLB(1)	Total	o.w. SG(2)	Basic	PLB(1)	Total	o.w. SG(2)	Basic	PLB(1)	Total	o.w. SG(2)
Chairman	1.00	1.25	2.25	2.18	1.00	0.80	1.80	1.70	1.00	1.95	2.95	2.80	1.00	2.10	3.10	2.94
Chief Executive Officer	0.55	0.69	1.24	1.19	0.55	0.44	0.99	0.94	0.55	1.07	1.62	1.58	0.58	1.15	1.73	1.67
Total	1.55	1.94	3.49	3.37	1.55	1.24	2.79	2.64	1.55	3.02	4.57	4.38	1.58	3.25	4.83	4.61

(1) This amount includes attendance fees paid by Société Générale and those paid by companies outside the Group; the net amount of the performance-linked bonus is therefore reduced by the amount of these attendance fees.

(2) The total remuneration paid by the Group excludes the attendance fees paid by companies outside the Group.

TABLE OF DIRECTORS' INDIVIDUAL REMUNERATION

Amounts received in 2004 from Société Générale (art. L. 2256102-1 of the French Commercial Code)

(In euros)		Perfor
Director	Basic-salary	mancelinked -bonus*	Attendancefees	Benefitsin kind
Daniel Bouton	1,000,000		42,440 (1)	Car
Philippe Citerne	575,000		33,830 (1)	Car
Jean Azéma			6,658
Euan Baird			42,440
Gérard Baude			33,830 (2)
Pierre Bilger			20,683
Jacques Calvet			56,899
Elie Cohen			22,322
Yves Cannac			61,204
Robert A. Day			23,069
Kenjiro Hata			18,764 (3)
Marie-Thérèse Henry			11,509 (4)
Antoine Jeancourt-Galignani			51,048
Elisabeth Lulin			22,322
Philippe Pruvost			33,830 (2)
Patrick Ricard			48,896
Marc Sonnet			20,169 (4)
Serge Tchuruk			11,509
Marc Viénot			31,678
Anthony Wyand			56,899 (5)

(1) Attendance fees received by the Chairman and Chief Executive Officer are deducted from their performance-linked bonus.

(2) Paid to SNB Société Générale trade union.

(3) Paid to Meiji Yasuda Life.

(4) Paid to CFDT Société Générale trade union.

(5) o.w. EUR 39,118 paid to Aviva plc.

* See table above.

Attendance fees paid to Company directors

The total amount of directors' fees was set at the General Meeting of Shareholders on April 22, 2003 at EUR 650,000.

The rules for distributing attendance fees amongst directors, as decided by the Board of Directors on February 23, 2000, are as follows:

• half of total fees is split equally between all directors, although members of the Audit Committee each receive two parts;

• the other half is shared between the directors, according to the number of Board or Committee meetings they attended during the year.

Share ownership obligations of the Group's senior managers

In 2002, the Board of Directors decided that the members of the Group's Executive Committee should hold the following average minimum number of Société Générale shares:

	Number of shares
President	8,500
Chief Executive Officer	4,500
Other members of
the Executive Committee	2,500

The shares may be held directly or indirectly via the Company's employee share ownership plan. Those members of the Executive Committee who do not fulfill these conditions must meet the requirements upon exercising their stock options.

At December 31, 2004, the members of the Executive Committee held a total of over 147,000 shares, representing an average of over 16,000 shares per member.

Stock option plans

General policy

The vesting of stock option awards is intended to motivate, secure the loyalty of and reward three categories of employee. The first category comprises executives who have made a significant contribution to the Group's results with respect to their responsibilities. The second category is made up of highpotential executives, whose competences are the most highly sought-after on the labor market. The third category is aimed at executives whose work has proved remarkably useful to the Company.

In general, these stock options are vested for a period of seven years and are exercisable after three years. Except in specific cases, the exercise of stock options is subject to the beneficiary holding a valid employment contract with the Company on the date that the options are exercised. Since the 2000 plan, in view of the tax regime in force in France, beneficiaries resident for tax purposes in France may not transfer the shares received upon exercising the options until the fourth year following the exercise date.

At the proposal of the Compensation Committee, the Board of Directors decided in 2003 to examine the appropriateness of implementing a stock options plan each year and, if appropriate, to take a decision during its meeting in January.

2004 Plan

On January 14, 2004, following a proposal made by the Compensation Committee, the Board of Directors awarded new stock options designed to meet three main objectives:

• to secure the loyalty of highpotential young executives who have demonstrated their ability to perform consistently to a high standard;

• to send a strong message to high-achieving managers and experts in key positions, paying particular attention to the key executives of newly-acquired entities which are making a significant contribution to the Group's results;

• to reward senior executives for 2003's exceptionally good results.

The options were awarded to 1,550 Group executives, including the senior officers, and represent a total of 3,788,300 options (0.86% of the capital). The strike price of these options was set at EUR 70.00, representing no discount to the rounded average market price of the Société Générale share during the twenty trading days preceding the meeting of the Board of Directors. 791 beneficiaries (51%) were awarded options for the first time, 752 (48%) were young executives and 350 (22%) were women, with employees of subsidiaries accounting for 36% of total beneficiaries.

2005 Plan

On January 13, 2005, following a proposal made by the Compensation Committee, the Board of Directors awarded new stock options representing a total of 4,040,000 options. The strike price of these options was set at EUR 75.00, representing no discount to the rounded average market price of the Société Générale share during the twenty trading days preceding the meeting of the Board of Directors.

INFORMATION ON STOCK OPTION PLANS INTRODUCED AFTER THE END OF THE FINANCIAL YEAR

	Options vested		Options	Shares
Date	Strike price	Number ofoptions	exercisableas of	transferableas of	Expiry dateof options	Unitvalue (1)
13/01/2005	EUR 75.00o.w. Executive Committee (9)	4,040,000468,500	13/01/2008	13/01/2009	12/01/2012	15.12

(1) The unit value of stock options is provided for information purposes only. It was calculated using the Black & Scholes method for valuing transferable stock options, which does not apply to non-transferable options.

This theoretical value does not necessarily correspond to the capital gain that the beneficiaries may realize when they come to sell their securities, which will depend on the share price on the date the option is exercised.

Nor does it correspond to the value taken for determining the expense to be recognized when IFRS 2 takes effect. This value, calculated using a binomial method on the date the stock option is awarded and taking into account trends in exercising options noted at Société Générale, would amount to EUR 12.82 for the 2005 plan.

SOCIÉTÉ GÉNÉRALE STOCK OPTION PLANS at December 31, 2004

(with details of options awarded to Group senior management in office at the time of their allocation)

	Options vested									Options exercised
Date ofaward	Strikeprice	Number ofbeneficiaries	of options	Optionsas of	SharesNumber exercisable transferableas of	Expirydateof options	1998	1999	2000	2001	2002	2003	2004	Optionscancelled	Optionsoutstandingat end-2004	Unit value (1)	Potentialdilutiveeffect
	25/06/97 EUR 18.94o.w. Management	27	334 1,690,760594,000	25/06/02	25/06/02	24/06/04	28,60016,000	18,62016,000	44,5802,000	13,4400	454,965134,720	489,179137,300	530,636259,820	110,740	0	EUR 0.00
	24/06/98 EUR 45.35o.w. Management	25	541 1,953,200451,200	24/06/03	24/06/03	23/06/05	00	00	32,80022,000	11,2000	6000	428,63181,200	920,951212,280	99,200	459,818	29.48	0.10%
	08/09/99 EUR 48.50o.w. Executive Committee	9	714 3,502,400502,000	08/09/02	08/09/04	07/08/06		00	11,2000	8,4000	13,1500	32,000	92,505 1 043,08579,650	212,400	2,121,660	26.63
	02/08/00 EUR 51.00o.w. Executive Committee	–	1,477 2,268,0000	02/08/03	02/08/05	01/08/07			00	00	00	8,7540	72,8960	274,820	1,911,530	24.65
	12/01/01 EUR 66.00o.w. Executive Committee	9	258 3,116,500743,500	12/01/04	12/01/05	11/01/08				00	00	00	44,2500	217,000	2,855,250	14.11	0.64%
	16/01/02 EUR 62.50o.w. Executive Committee	9	1,092 3,543,977313,000	16/01/05	16/01/06	15/01/09					00	00	1800	273,127	3,270,670	17.12
	22/04/03 EUR 52.00o.w. Executive Committee	9	1,235 3,891,579331,000	22/04/06	22/04/07	21/04/10						00	00	80,396	3,811,183	24.52
	14/01/04 EUR 70.00o.w. Executive Committee	9	1,550 3,788,300469,250	14/01/07	14/01/08	14/01/11							00	20,000	3,768,300	14.77
	o.w. Management		23,754,7163,403,950				28,60016,000	18,62016,000	88,58024,000	33,0400	134,720	250,500	551,750		468,715 1,019,069 2,611,998 1,287,683 18,198,411		0.74%

N.B. In 1997, 1998 and 2001, the awards were made in the form of stock subscription options. In 1999, 2000, and from 2002 to 2004, they were stock purchase options. The strike price corresponds to the average opening market price of the Société Générale share during the twenty trading days preceding the Board of Directors' meeting at which it was decided to award the options, with a 20% discount for options vested in 1997 and 2000.

This theoretical value does not necessarily correspond to the capital gain that the beneficiaries may realize when they come to sell their securities, which will depend on the share price on the date the option is exercised. Nor does it correspond to the value taken for determining the expense to be recognized when IFRS 2 takes effect.

(1) The unit value of stock options is provided for information purposes only. It was calculated using the Black & Scholes method for valuing transferable stock options, which does not apply to non-transferable options.

This value, calculated using a binomial method on the date the stock option is awarded and taking into account trends in exercising options noted at Société Générale, would amount to EUR 17.33 for the 2002 plan, EUR 13.23 for the 2003 plan and EUR 14.92 for the 2004 plan.

STOCK OPTIONS HELD BY THE CHIEF EXECUTIVE OFFICERS

	Dateof Award	Strikeprice	Numberof optionsawarded	Optionsexercisedin 2004
Chairman	24/06/1998	45.35	104,000	47,000
	08/09/1999	48.50	160,000	0
	12/01/2001	66.00	250,000	0
	16/01/2002	62.50	90,000	0
	22/04/2003	52.00	109,000	0
	14/01/2004	70.00	120,000	0
	13/01/2005	75.00	120,000	0

	Dateof Award	Strikeprice	Numberof optionsawarded	Optionsexercisedin 2004
Chief executive	25/06/1997	18.94	40,000	40,000
officer	24/06/1998	45.35	52,000	0
	08/09/1999	48.50	90,000	0
	12/01/2001	66.00	137,500	0
	16/01/2002	62.50	50,000	0
	22/04/2003	52.00	60,000	0
	14/01/2004	70.00	66,000	0
	13/01/2005	75.00	66,000	0

Stock options granted to and exercised by the ten employees who are not chief executive officers and who were awarded the largest number of stock options:

	Numberof options	Weightedaverage price
Options vested in 2004 by a Group company	354 000	EUR 70.00
Options exercised in 2004 on the stockof a Group company	269 860	EUR 47.12

Tables drawn up in accordance with the recommendations of the Autorité des Marchés Financiers (French Securities Regulator).

Société Générale stock options granted to employees

Plan	Total of 10 largest optionsawards per plan	Plan	Total of 10 largest optionsawards per plan
1997	129,060	2001	476,000
1998	140,000	2002	251,375
1999	272,000	2003	308,125
2000	22,000	2004	354,000

SOCIÉTÉ GÉNÉRALE GROUP - 2004 ANNUAL REPORT

Sol Lewitt

Born 1928 in Hartford, United States Horizontal color bands & vertical color bands, 1990 Engraving on Somerset paper 61 x 105 cm

Corporate Social Responsibility

Fully committed to Corporate Social Responsibility

Our view of corporate and social responsibility means that we fully take into consideration the aspirations of all our stakeholders: customers, shareholders and suppliers, our 92,000 employees and those members of the community who observe our activities and have certain expectations of the company. "

In 2004, the Group reasserted its position as a truly global player and, as such, it strives to apply the same rigorous approach to corporate social responsibility in all 80 countries in which it operates, taking into account the diversity of cultures and contexts that it encounters.

One of the main challenges we face as a Group is the management of our exposure to risk, which is the key to preserving our business momentum over the long term. The stakes are continually being raised with the emergence of new categories of risk (multiple environmental risks) and the increase in legal and imagerelated issues. However, Société Générale has effectively geared its organization towards meeting these new challenges.

The Group has taken steps to integrate social and environmental considerations into all new initiatives, and evaluates its new products for potential risks, including those relating to its image. Rather than hindering our future development and innovation, environmental and social concerns are creating new market opportunities, which the Company is already seizing, notably by participating in the market for greenhouse gas emission quotas and the financing of green energy sources.

Corporate Social Responsibility does not just concern the Group's management. It concerns all our employees. We share the same values of professionalism, team spirit and innovation, and it is this common culture that has been behind Société Générale's success these past 140 years."

A component stock of the main international sustainable development indexes —

An independent ombudsman since 1996 —

Daniel Bouton Chairman and Chief Executive Officer

CONSOLIDATION SCOPE AND METHOD

This section of the report has been drafted in accordance with the specifications of the NRE law (see page 298) and the main international Corporate Social Responsibility (CSR) reporting standards.

As a general rule, information on policies and management systems relates to the same global scope as the consolidated financial statements. For all other information, especially indicators, the scope is indicated in the section in question.

At Société Générale's request, the Statutory Auditors, Ernst & Young Audit, have verified the environmental and social information presented in this document. For Ernst & Young's appraisal, see page 303.

THE INNOVATION PROGRAM

In mid-2003, the Group launched an initiative entitled "Innovation at all levels", managed by a team of "innovactors" and designed to encourage employees to submit innovative ideas and projects on any theme. The program awarded prizes in 2004 to the best ideas in each of 7 categories, including Customer Satisfaction, Working Environment and Sustainable Development. 150 innovations were selected for the competition.

DISTRIBUTION OFADDED VALUE FROMSOCIÉTÉ GÉNÉRALE'SACTIVITIES	59%
	13%
Portion distributed to staffPortion paid to governmentsPortion distributed to shareholders	28%

2004

In millions of euros		2004
Net banking income	A	16,416
Operating expenses(excl. personnel expenses)	B	3,702
Gross added value	C = A – B	12,714
Other income statement items (1)	D	(1,588)
Net added value	E = C + D	11,126
Personnel expenses		6,603
Income tax		1,398
Net income		3,125

(1) Depreciation charges (-662), net allocation to provisions (-541), net income from companies accounted for by the equity method (+42), net income from long term investments (+119), exceptional items (-48), goodwill amortization (-217, -186), net allocation to the fund for general banking risks (+28), minority interests (-340).

Over 60,000 existing and former employees are Société Générale shareholders

—

7,750 new recruts across the world in 2004 —

The challenges facing the Group

As financial intermediaries, banks play a crucial role in fostering economic growth. By providing expert banking services, they help their customers to develop. They also help to anticipate and identify the risks affecting economic activity.

The banking sector has always been heavily regulated by the public authorities or by supervisory and regulatory bodies. However, our responsibilities must extend beyond mere compliance with existing regulations, for two main reasons:

• the health and solidity of the financial sector are essential for economic and social development,

• as a bank, we have a major role to play in the community by offering basic financial services, providing financial support to microfinance institutions, helping to limit overindebtedness, etc.

Trust, the very foundation of the banking business

In order to counter potential threats to the basic intangible assets that are vital to our longterm development, such as our image and reputation, we need to reinforce our risk management procedures on an ongoing basis and bolster customer confidence. Société Générale has worked continuously over the past few years to strengthen its surveillance procedure, focusing on four main areas: corporate governance, compliance, risk management and internal control procedures.

If we are to inspire confidence in our stakeholders, we need to show through our behavior and our organization that we maintain the highest standards of business ethics, notably with respect to corruption, money laundering and the financing of terrorism.

We firmly believe that by listening and responding to the concerns of our stakeholders we can both measure and retain their confidence. Exchange and dialogue are the keys to achieving mutual growth and enrichment.

Creating leverage through our businesses

The biggest contribution we can make to sustainable development is through our business activities.

By gradually integrating non-financial criteria into our financing policies, we are fostering a more responsible approach to economic development. In addition, our range of socially responsible investment products, although still somewhat modest in size, is helping to encourage the companies in which we invest, for both proprietary and client-driven activities, to incorporate sustainable development concerns into their business.

Responsible management of our employees' skills

This principle of social responsibility also applies to the management of our employees' skills. We face a number of challenges for the future:

• keeping pace with the changes in our businesses by maintaining a balanced distribution of skills; • implementing policies that reconcile professional and personal development;

• adopting equal opportunity practices in everyday work (nondiscriminatory practices, equal opportunities in recruitment and promotion, etc.).

Limiting our impact on the environment

Although the direct environmental impact of the banking sector remains modest compared with that of the industrial sector, over the past few years we have targeted those areas that we can effectively control: reduction of paper and fluid consumption, optimization of business travel, waste management and the application of HQE (High Environmental Quality) standards to our owned premises, etc.

THE TEN PRINCIPLES OF THE GLOBAL COMPACT

Human rights ■ PRINCIPLE 1: Businesses should support and respect the protection of internationally proclaimed human rights within their sphere of influence, and ■ PRINCIPLE 2: …refuse to participate in or condone human rights abuses.

■ Labor standards ■ PRINCIPLE 3: Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining ■ PRINCIPLE 4: …the abolition of all forms of forced and compulsory labor ■ PRINCIPLE 5: …the abolition of child labor, and ■ PRINCIPLE 6: …eliminate discrimination in employment and occupation.

The Group's commitments

In 2004, Société Générale supported the addition of the 10th principle to the Global Compact, dedicated to the fight against corruption.

Société Générale's commitment to human rights is reflected in its practices, for example:

• the principles of the Global Compact are integrated into the guidelines issued to suppliers;

• all financing projects are assessed in advance to ensure they respect human rights;

• the Group has established rules governing its operations in "sensitive" countries: banking activities may only be developed in these countries if they meet the needs of the local customer base.

At end-2004, Société Générale had operations in 9 (1) of the 27 countries classified as sensitive by EIRIS (2). Since 2001, the Company has been actively involved in the work of UNEPFI (3), organizations such as the Wolfsberg Group (prevention of the financing of terrorism) and Transparency International. It supports the London Principles (4) and the Carbon Disclosure Project (UK initiative to reduce greenhouse gas emissions). In 2004, the Group again sponsored the annual OECD forum and the FEDERE (5).

—

At end-2004, Société Générale signed the Charter of Diversity with 35 other major companies in France, underlining its commitment to maintaining cultural, ethical and social diversity among its staff.

In France, Société Générale has been a member of CNDD (6) since the council was formed, and remains part of the ORSE (7) network.

In the United Kingdom, Société Générale has joined Business in the Community (8), while in the Czech Republic, KB has become a member of a group formed by UNEPFI, charged with developing responsible financial practices in Central and Eastern Europe. KB has also incorporated the social and environmental criteria recommended by the BERD into its risk management procedures.

(1) Algeria, Cameroon, China, Egypt, United Arab Emirates, Iran, Kazakhstan, Tunisia and Vietnam.

(2) Ethical Investment Research Service. EIRIS is the first and oldest (1983) European environmental and social information agency. FTSE4 Good uses EIRIS' research to compose its indexes.

(3) United Nations Environment Program

Finance Initiative.

(4) The London Principles for Economic Prosperity, Environmental Protection and Social Development.

(5) European Forum for Sustainable Development and Corporate Responsibility, organized by Les Echos.

(6) French National Council for Sustainable Development.

The 6 commitments of the Charter of Diversity

1. To alert the managers and staff involved in recruitment, training and career management to the issues of non-discrimination and diversity; 2. To respect and promote the application of the principle of nondiscrimination in all its forms and at all stages of human resources management, notably recruitment, training, career advancement and promotion;

3. To seek to reflect the diversity of French society at all levels of the workforce, notably its cultural and ethnic diversity;

4. To convey our commitment to non-discrimination and diversity to all our employees and advise them on the practical implications of this commitment;

5. To design and implement a policy of diversity and make it a subject of dialogue with employee representatives;

6. To include a chapter in the annual report describing our commitment to non-discrimination and diversity (actions implemented, practices and results).

(7) Observatory of Corporate Social Responsibility.

(8) An NGO with over 700 members that is committed to the gradual improvement of corporate responsibility. It encourages businesses to adopt responsible practices, support disadvantaged communities and innovate through shared experiences.

■ Environment ■ PRINCIPLE 7: Businesses should support a precautionary approach to environmental issues ■ PRINCIPLE 8: …undertake initiatives that demonstrate environmental responsibility, and ■ PRINCIPLE 9: …encourage the development and diffusion of environmentally friendly technologies

■ Anti-corruption ■ PRINCIPLE 10: Businesses should work against all forms of corruption, including extortion and bribery.

Managing our Corporate Social Responsibility

Maintaining active dialogue with our stakeholders

Stakeholders	Specific CSR challenges	Examples of dialogue and reporting
■ Regulatory authorities in the countrieswhere we operate■ Professional bodies	■ Public authorities (France and abroad) ■ Contribute to the development of ethical, fairand transparent commercial practicesand implement them■ Contribute to regulatory projects	■ Consultation meetings■ Inspection and verification assignments carried outby the regulators■ Interprofessional working groups
■ International organizationsand institutions	■ Comply with signed commitments■ Contribute to the development of global governance	■ Participation in working groups for UNEPFI,Global Compact, OECD, etc.
■ Shareholders, investors(individual and institutional)■ Ratings agencies	■ Offer levels of remuneration that are sustainablein the long-term and in line with market rates aspart of a global risk management strategy■ Supply transparent information■ Make it easier for shareholders to exercisetheir responsibility	■ AGM (Annual General Meeting), annual report, quarterly results■ Shareholders' Meetings, Shareholders' Club, Shareholders'Consultative Committee■ Road-shows, meetings with financial and non-financial ratingsagencies, responses to agencies' questionnaires
■ Customers	■ Satisfy the needs and expectations of customersthrough honest, fair and transparent businessrelationships■ Promote the development of CSR best practices	■ Customer advisor meetings, telephone advisors, homebanking, etc.■ Customer relations services, ombudsman since 1996■ Satisfaction surveys (all retail markets) at national and local level■ Social and environmental evaluations (project finance)
■ Suppliers	■ Promote the development of CSR best practices	■ Calls for tender, specifications (notably including environmentalclauses), questionnaires for suppliers
■ Employees	■ Promote the personal and professionaldevelopment of our employees	■ Individual meetings with HR managers, appraisal process■ In-house satisfaction surveys■ Conferences
■ Employee representative bodies	■ Maintain in-depth social dialogue	■ European Works Council, Group Committee, CCUES (1),Establishment Committees, CHSCT (2), etc.■ Meetings with trade union organizations■ Internal Equality Commission (CPRI)■ Board of Directors (staff-elected directors)
■ Retired employees	■ Maintain a social link with former employeeswho have contributed to the Group's development	■ The internal newsletter, Sogéchos■ The pensioners' association (Amicale des Retraités) is in closecontact with the Corporate Resources and Human RelationsDepartment■ The Pensioners' Association has access to the Company'scommunications resources
■ Consumer associations	■ Develop non-discriminatory and transparentcommercial practices■ Communicate on our product policy	■ Financial sector consultative committees■ Websites■ Responses to requests (via the Press, Quality and MarketingDepartments and the Customer Relations Department, etc.)
■ Environmental/human rights NGOs,civil society	■ Adopt a socially responsible approach■ Comply with our commitments to the community	■ Corporate sponsorship, long-term partnerships withassociations and NGOs■ Responses to requests (via the Press, Quality and MarketingDepartments and the Customer Relations Department, etc.)■ Working groups with different NGOs

(1) Central committee for the inter-union agreement on social and economic union.

(2) Committees for health, safety and working conditions.

An integrated organization

Société Générale has been actively involved in promoting corporate governance practices throughout the business community, notably by overseeing the production of the AFEP-MEDEF (1) reports on corporate governance in 1995, 1999 and 2002. Details of all Société Générale's corporate governance measures are contained in the first section of this annual report. Our management system comprises the following levels:

• An Executive Committee, responsible for approving Group strategy and deciding on the main areas of action.

• Various bodies and structures, designed to promote sustainable development throughout the Group (see below).

• A Quality, Innovation and Sustainable Development Department (attached to the Corporate Secretariat), responsible for managing this policy.

• A network of contributors (consisting of 25 executive staff) throughout the Group's divisions and entities, dedicated to sustainable development and responsible for defining, promoting and reporting on their departments' action plans.

The Group has also implemented a number of tools to facilitate the management of its policy: a sustainable development intranet database, a press review and a staff awareness program, involving the distribution of brochures and organization of conferences. • In 2004, the Group's measurement and reporting protocol, comprising some sixty statistical indicators, was reviewed by Ernst & Young. It will be distributed to all Group entities over the course of 2005.

• This management system is based on various international standards and reference systems, notably the Global Reporting Initiative (GRI), the Global Compact and UNEPFI (see appended table, page 297).

(1) Association Française des Entreprises Privées (Association of French Private-Sector Companies) and Mouvement des Entreprises de France (French Business Confederation).

RESPONSIBILITIES AT ALL LEVELS

Chairman and CEO, & Chief Executive Officer, Executive Committee

COMMITMENTS, STRATEGIES & STANDARDS

• Corporate governance system
• Compliance procedures: • legal,
• fiscal,
• anti-money laundering, • prevention of the financing
• of terrorism
• Compliance Committee
• General Inspection department and internal control

Corporate departments

RISKS

• Risk Committees
• Inclusion of sustainable development considerations in loan applications

HUMAN RESOURCES

• Personal safety rules
• Global HR Information Centre
• Internal regulations
• Charter of diversity

MANAGEMENT

• Group Property Committee
• Purchasing Charter
• Sustainable development specifications for suppliers

FINANCE & COMMUNICATION

• Investor Relations Department
• Intranet site and public website

Divisions

INDIVIDUAL & BUSINESS CUSTOMERS ■ Quarterly sustainable development

• steering committee
• Independent ombudsman
• Customer Relations Department
• New Products Committee

CORPORATE & INVESTMENT BANKING

• New Products Committee
• Screening Committee (high-risk projects)
• Committee for the review of financing portfolios
• Study group to look at ways to integrate non-financial criteria into lending activities

GLOBAL INVESTMENT MANAGEMENT AND SERVICES

■ SRI analysis

• Dedicated SRI team
• Ethical Committee on biotechnology

CRÉDIT DU NORD

• Independent ombudsman
• Customer Relations Department ■ Social and environmental analysis procedure

The Group's achievements

External recognition of our performance

and obtained the maximum score for the management of its customer and supplier relationships.

		$-1000$	$\sim$	1.177
×sta Givenetti:	35
Ö.
Circo
				w

(– below average, = average, + above average, ++ pioneer)

on a scale of 7 ratings ranging from AAA to CCC.

The Société Générale share is included in 86% of French ethical funds (4).

(1) Prevention of corruption, compliance, risk management, corporate governance and knowledge of sustainable development issues.

(2) Level of environmental management policy and system, exploitation of business opportunities, proprietary environmental performance and environmental risk management, particularly in financing activities.

(3) Development of human capital, social practice measures, commitment to stakeholders and consideration of customer needs and populations in difficulty. (4) Novéthic – Special French SRI report – La lettre de l'économie responsable, July 2004

Table summarizing main objectives and achievements

	2004 objectives	Achievements	2005-2007 objectives
Commitments	■ Increase Société Générale'scommitments and involvement	■ Supporting the 10th principle of theGlobal Compact■ Participation of SGKB in the UNEPFI CEETF	■ Increase our involvement in UNEPFIworking groups
Organization andmanagement system	■ Improve the reliability of and extendthe measurement and reportingof CSR indicators■ Increase employees' awarenessof CSR issues	■ Establishment of a formal reporting protocoland indicators■ Conferences on climate risks, fair tradeand relations with NGOs	■ Disseminate a Group directiveon CSR■ Increase internal communicationson CSR
Compliance andanti-money laundering	■ Merge the different compliance manuals ■ Development of a Profile tooland charters into a single charter■ Develop a Profile expert softwarepackage to exploit available data oncustomers and their transactions■ Gradually extend the use of thee-learning tool	■ Development of new e-learning modules	■ Deploy Profile and Siron tools■ Adapt compliance measures to the newinternal control regulations
Risks	■ Implement Basel II	■ Implementation of the Basel II project■ Reinforcement of business continuity plans	■ Implement Basel II■ Maintain BCPs
Customers	■ Continue to include SEE criteria inour financing activities■ Develop partnerships in themicrofinance market■ Extend the sustainable developmentproduct range■ Undertake new qualityassurance projects	■ Creation of a steering committee for the inclusionof SEE (1) criteria in project financing(SERA (2) project)■ Financing and acquisition of stakesin Microfinance Institutions■ New ISO 9001 certifications for CGA, Sogécap,Sogessur, Société Générale Marocainede Banques	■ SERA project: establish operatingdirectives for the project by business line,train all sales staff in the SEE approach■ SEE rating of counterparties in thecommodities financing business line■ Test out a paper-free accountwith customers
Suppliers	■ Verify compliance with theenvironmental and social aspectsof purchasing procedures throughthe internal audit■ Implement a general policy of recyclingelectronic products at the end oftheir life	■ Integration of an SEE suppliers' questionnairein calls for tenders■ Internal audit regarding the inclusion of socialand environmental clauses in calls for tendersand contracts■ Implementation of a general policy for recyclingIT and electronic equipment at the end of its life	■ Consolidate practices for all buyers■ Increase the use of recycled paper
Community	■ Remain loyal to our major partners■ Pay the proceeds from Jazz giftsto a charity organization	■ Maintenance or renewal of sponsorship agreements ■ Reinforce our local partnershipswith our major partners (OECD Forum, APF UNAPEI)■ Payment of proceeds from Jazz giftsto Handicap International■ Dec. 2004-Feb. 2005: EUR 1 paid to UNICEFfor each young person's account opened	in France and abroad
Employees	■ Encourage the systematic applicationof good practices	■ Signature of the Charter of Diversity■ Implementation of the Global EmployeeShare Ownership Plan	■ Continue to improve the reliabilityof social indicators and expandthe reporting scope■ Increase the diversity of teams■ Promote the personal developmentof employees (Personal Performanceand Development)
Environment	■ Continue to expand the proprietaryreporting scope■ Carry out a greenhouse gas emissionsassessment at the central offices■ Define Group standardsfor property management	■ Gradual expansion of the reporting scope■ Completion of a greenhouse gasemission assessment■ Increase in the proportion of "green" energyfrom 15% to 21% for the Tour SG	■ Improve the reliability of indicatorsand further expand the Group's reportingscope■ Limit air travel for business trips■ Feasibility study for ISO 14001certification of our proceduresfor managing the central offices■ Promote eco-friendly practices■ Increase the proportion of "green"electricity

(1) SEE: Social, Ethical and Environmental – (2) SERA: Socially and Environmentally Responsible Approach

Responsible banking practices

Compliance and the prevention of money laundering

The key role of compliance

Compliance has always been one of the Bank's core values. It is not merely the responsibility of the Group's dedicated compliance officers - rather it concerns all employees and in particular the sales staff and their managers. In the banking sector, compliance practices are based on three main principles:

• only working with customers or counterparties that are well known;

• the ability to justify an adopted stance, under any circumstances;

• the ability to assess the economic legitimacy of a transaction. For a long time, a bank's image was based primarily on the sense of security it inspired in its customers. However, the increase in business during the 1990s resulted in the introduction of additional regulations and an ever greater awareness of image risk. More recently, the banking community has come under attack for financing projects that pose a threat to the environment or developing activities in countries with lax regulations.

In 1997, the Group set up a Compliance Department that is charged with limiting potential risks to the image of the Company, in addition to traditional tasks relating to the surveillance of markets and financial products. This has led to the implementation of specific measures designed to prevent risks such as involvement in structured financing arrangements designed to conceal the real state of a company's finances from third parties.

At the same time, the Compliance Department has also been responsible for the prevention of money laundering since 2001.

The tasks of the Compliance Department —

■ To define, in accordance with the regulators' requests and legal or regulatory requirements, applicable compliance and antimoney laundering policies, principles and procedures and ensure that they are implemented;

• To ensure compliance with financial market regulations, and prevent and manage any potential conflicts of interest regarding customers;
• To submit to the Compliance Committee ethical rules to be respected by all Group staff;
• To train, advise and increase operating staff's awareness of compliance issues;
• To coordinate relations between Group entities and French and foreign regulators.

TOOLS TO HELP COMBAT MONEY LAUNDERING AND TERRORISM

■ SAM and LABO: filtering of international money transfers to combat the financing of terrorism. 36 million transactions were filtered in 2004.

For transactions involving the Distribution Network:

• CRIBLE: tool used for monitoring checks and certain international transfers;
• EMBARGOS: procedure for filtering the customer database;
• PROFIL: detection of suspicious transactions based on an analysis of the operating profile of each account.

Highlights of 2004

New anti-money laundering measures

Société Générale has continued its efforts to reinforce anti-money laundering measures:

• implementation of an IT tool in the French Networks to analyze the functioning of each account and detect suspicious transactions (coming on stream beginning of 2005);

• acquisition of a similar tool for the retail network's foreign subsidiaries (to be installed at the beginning of 2005);

• acquisition of an e-learning tool on the prevention of money laundering, developed by the FBF (French Banking Federation) and implemented in the dealing rooms and throughout the French Networks in January 2005.

Reinforcement of our organization

Société Générale has reorganized its Investment Banking arm to enhance the existing system for the prevention of compliance risk ahead of the new European directives on capital market activities. This has resulted in the creation of seven dealing room positions for compliance officers. The new officers work in close proximity to the operating staff, but also report to the Compliance Department to ensure complete impartiality.

In order to reinforce anti-money laundering procedures, the Central Compliance Department will be expanded from 23 to 34 staff in 2005. Although money laundering and compliance issues are the responsibility of all our employees, a total of 200 full-time staff have been assigned to monitor potential threats throughout the Group.

Combating corruption

Société Générale has very strict rules on the prevention of corruption, which comply fully with French legislation. Information concerning obligatory measures and controls is disseminated throughout the Group in the form of directives that are updated on a regular basis. Since 2001, Société Générale has grouped all applicable French legislation on the prevention of the corruption of public representatives in Europe and abroad into a single Group directive that is distributed to all staff.

In 2004, the Group reviewed its directive on "the prevention of money laundering in the Group". The document now includes special control measures covering business relations with persons who are deemed to be politically exposed by virtue of their current or previous positions, and with companies associated with these persons.

Tax havens and noncooperative countries —

Société Générale has defined strict rules to avoid dealing with illegitimate operations in countries considered to be tax havens by the OECD or included in the FATF (Financial Action Task Force) black list. However, the Group does not rule out working in these countries provided they already have an effective financial and banking activity that meets the economic needs of a local customer base (as in the case of Monaco).

Where necessary, the Group respects the specific provisions of the French Tax Code regarding countries offering significant tax benefits and systematically submits a tax return in France for revenues generated by entities located in these countries if they fall under the scope of article 209 B of the Tax Code.

270

staff (including 200 full-time employees) responsible for compliance and the prevention of money laundering —

Risk management and internal control

Supporting business development through sound risk management

Risk management is an integral part of Société Générale's corporate culture. Its main purpose is to contribute to the Group's development by optimizing its overall risk-adjusted return.

A segregation of roles for better management

Risks are inherent to all banking activities and must therefore be taken into account from the inception of a transaction until its completion. As a result, responsibility for risk management lies first with the operating divisions. Their role involves:

• analyzing the potential risks of each transaction they originate; • checking that these are compatible with their assigned limits; • ensuring dynamic risk manage-

ment;

• assessing the risk-adjusted return of the transactions.

The cost of risk (1) is factored into staff performance-linked pay. In addition, to increase the efficiency of the risk management system and ensure it is constantly adapted to new types of risk, the Risk Division provides an independent control function, approving any risks taken and monitoring them as they evolve. The Risk Division is independent from the operating division and reports directly to the Group General Management.

Clearly-defined principles

The Group applies the following principles:

• strict compliance with legal and regulatory requirements and with the standards drawn up as part of the Group's risk management policy. This compliance is monitored on a permanent basis;

• the obligation to advise clients appropriately;

• development of business relationships only with counterparties whose identity has been clearly

(1) In the case of credit, the cost of risk measures the losses incurred as a result of default by counterparties who are clients of the bank. established and who share the same sense of responsibility and integrity as our Group;

• application of the principles of prudence, good conduct and risk quality and diversification, even though this may affect short-term profitability;

• arrangement of significant financing transactions for clients only if these transactions appear on their balance sheet or if their external auditors have been fully informed.

Widely disseminated objectives and procedures

The strategy is based on clearlydefined targets for each risk category (credit, market, country, operating). It is implemented through policies and procedures defined by the Risk Division which set out criteria for selecting the most suitable transactions for the Group. This information is disseminated via our dedicated intranet site.

Exposure to credit risk on non-bank clients:

EUR 304 billion (EUR 267 billion in 2003)

—

89% in major developed countries

32%

in off-balance sheet commitments —

Risk provisioning in 2004:

EUR 541 million

(i.e. 20 bp of riskweighted assets) (EUR 1,226 million in 2003) —

Non-performing loans:

5%

of customer loans (5.8% in 2003) Provisioning ratio: 77% —

A permanent supervision framework

Risk management procedures are monitored and controlled at a number of levels:

• in its preparatory work for the Board of Directors, the Audit Committee carries out an indepth review of the measures in place for managing, preventing and assessing risk;

• during the Risk Committee meetings, the Executive Committee defines the risk management systems, reviews changes in the characteristics and risk profile of the Group's portfolio and decides on any changes in the corresponding strategies;

• following on from the Risk Committee, the Major Risk Committee reviews significant exposure (on individual counterparties or portfolio segments);

• before any new activity can be launched, the New Products Committee ensures that the infrastructure required for its proper management is in place and that the risks generated are correctly analyzed, measured and controlled;

• lastly, the internal audit teams and the General Inspection department issue an opinion on any risks identified in the course of their assignments.

Suitable methods and systems

Société Générale is constantly working to adapt its risk monitoring and management resources. The information systems, in particular, are regularly upgraded to accommodate changes in the products processed and the associated risk management techniques.

In the case of counterparty risk on marketable products, the existing methods used to measure exposure are backed up using stress tests to reinforce the transaction selection process.

With respect to market risk, the current measurement model used internally (VaR) has been approved by the French Banking Commission for nearly all transaction types.

In credit risk, internal counterparty and loan ratings based on the principles established by the Basel II Committee (IRBA method) are gradually being incorporated into the existing approval and monitoring procedures. This approach will supplement the economic capital, risk-adjusted return on capital (RAROC) and economic valueadded (EVA) indicators introduced by the Group in recent years. However, adapting the methods requires considerable resources to model the Group's activities and modify the information systems accordingly.

The Group has also set up a business continuity plan, managed by a dedicated department, and regularly conducts tests on its crisis management procedures.

Business Continuity Plan (BCP) —

This involves the development of adequate organizational structures, procedures and resources to enable Société Générale's entities to deal with natural/accidental disasters or acts of willful damage, in order to protect their staff, assets and key activities and ensure the continuation of essential services and ultimately the resumption of normal activities. In 2003, the Group set up a specific department for business continuity, which is charged with the following tasks:

■ proposing an overall Group policy;

■ defining applicable methodologies;

■ disseminating best practices;

■ coordinating and harmonizing the business continuity systems established by the various divisions and corporate departments.

The main principles of the BCP and the roles of the various participants are set out in a Group internal directive.

EUR 25 million

Average trading VaR in 2004 —

VaR = Value at Risk

• Estimate of the maximum loss that may be incurred on a given portfolio of assets over a specified period and for a particular probability level, based on an historical analysis of market trends (interest rates, exchange rates, equities, etc.)

Ensuring the ongoing development of our business by constantly reinforcing internal controls

Given the extent and diversity of the risks inherent to banking activities, internal control plays a vital role in Société Générale's business.

Internal control is defined in the Group Audit Charter as all the means and resources that enable the Group General Management to ensure that the transactions carried out and the organization and procedures implemented are compliant with legal and regulatory requirements, professional and compliance practices, internal rules and the policies defined by the company's executive body. Internal control is designed in particular to:

• detect and measure incurred risks, and manage this exposure in an adequate manner;

• guarantee the reliability, integrity and availability of financial and management data;

• verify the quality of the information and communication systems.

The internal control system is everybody's responsibility

Our internal control system relies primarily on the permanent supervision of activities at local level by operational staff. This comprises all procedures implemented on a permanent basis to guarantee that transactions carried out at operational level are correctly handled, secure and valid. The permanent supervision system operates at two levels: • day-to-day security: all operational staff are required to comply with the applicable rules and procedures in all transactions carried out;

• formal supervision: management is required to make regular checks in accordance with strict procedures, to verify that staff are complying with rules and procedures for processing transactions and for ensuring day-to-day efficiency and security.

In order to ensure this system functions correctly, operational methods need to be formally defined and communicated to all Group staff. The permanent supervision procedures have been adapted to the activities of each entity and are set out in specific documents.

A number of departments are involved in the internal control system

The middle and back office are responsible for the administrative and financial processing of transactions carried out within the Group. In addition, they carry out first-level controls in accordance with regulatory requirements.

At the same time, the Group's transactions are regularly controlled by various independent departments:

• the Risk Division, which is responsible for the Group's risk management and control system, validates all risks incurred and monitors any changes in exposure;

• the Finance and Corporate Planning Department, which draws up the Group's consolidated and parent company accounts, and checks that all financial and accounting data communicated externally are reliable and accurate;

• the divisions' Finance Departments, which assess the quality of the information submitted to the Group for the consolidated financial statements, and monitor compliance with accounting, regulatory and management stipulations;

• the Compliance Department, which ensures that all Group staff observe the compliance rules and principles applicable to the various businesses;

• the Legal and Tax Departments which monitor all fiscal and legal aspects of the Group's activities in conjunction with the business departments;

• the internal audit and General Inspection department.

Each Group entity has its own internal audit department

The internal audit is a permanent system designed to regularly assess the efficiency of the inter-

THE AUDIT COMMITTEES

The internal audit Committees are organized at least once a year, to bring together the audit departments and their hierarchical management, and assess their activities. As a result they are a vital part of the overall internal control system. The agenda for each meeting is set by the Head of Group Internal Audit, and

covers aspects such as permanent supervision, the assignments carried out over the course of the year and the forthcoming audit schedule, the implementation of the General Inspection department's recommendations and, where applicable, those of the supervisory authorities and external auditors.

nal controls employed by the entity to which it is attached. It is based on three principles: independence, impartiality and universality. All Group activities and entities have an internal audit department, which is authorized to inspect all aspects of their operations. Given the risks at stake, each department is provided with adequate resources, from both a qualitative and quantitative point of view, to carry out its functions effectively. The internal audit departments comprise some 1,100 auditors, which is higher than the standard staff/auditor ratio of 1% for the banking sector.

Société Générale's control system is divided into two levels: the internal audits and the General Inspection department.

Each Group division has its own internal audit department, managed by the chief auditor, who is directly answerable to the manager of the division. The chief auditor has hierarchical and functional authority over all the auditors in the division. The system was recently reinforced with the creation of an Audit department for the support functions, which is attached to the Corporate Secretary.

The individual internal audit departments are charged with identifiying the areas of risk to which their division is exposed. They then define an annual schedule of audits to ensure that the exposure is covered regularly and in full. Under this framework, the auditors carry out controls to check the security, compliance and efficiency of the division's activities, and evaluate the quality of the permanent supervision system in place. They then put forward recommendations based on their observations, and follow these up to ensure they are implemented correctly.

The system is reinforced with specialized audits in areas requiring specific skills: these include an accounting audit, legal audit, an audit of counterparty risks and information technology security. The management of the Corporate department in question takes direct responsibility for these specialized audits, and is thus able to monitor compliance with Group principles and procedures within the business and keep a closer eye on activities at operational level. The specialized audits can also intervene to assist the division audits in specific areas.

The General Inspection department carries out inspection assignments every year and monitors the overall quality of the internal control system

The General Inspection department inspects the business activities and operations of all entities within the Group according to an annual program of assignments that is validated by the Group General Management. It reports its findings, conclusions and recommendations to the General Management. The Group Executive Committee then carries out quarterly reviews to ensure that the Inspection's recommendations are being implemented accordingly.

The General Inspection department is also responsible for ensuring that the internal control system implemented across Société Générale and its subsidiaries is coherent and efficient. To do this, it carries out the following functions:

• it inspects the various Corporate departments involved in internal controls;
• it assesses the quality of the work carried out by the internal audit departments;
• it validates the audit schedule submitted by the Audit departments;
• the Head of Group Internal Audit is in charge of all the chief auditors and specialized audits. As part of his role, he is required to meet regularly with the Board of Directors' Audit Committee and maintains close ties with the Statutory Auditors and representatives of the supervisory authorities.

THE AUDIT IN FIGURES

The internal audit departments comprise nearly 1,100 staff. The Group divisions and specialized audit departments have more than 900 auditors, of which 80% are employed in Retail Banking, 12% in Corporate and Investment Banking, 5% in GIMS, and the remainder in the specialized audit departments (accounting, legal, IT, etc.). The General Inspection department comprises 190 inspectors.

Responsibility to our customers

A relationship based on quality

A high level of customer satisfaction that is increasing constantly

In 2004, Société Générale conducted a national telephone survey of 7,500 customers, which showed that satisfaction levels had increased in all three major retail banking markets (individuals, professionals (1), businesses), highlighting the Group's improved competitive position. This study was part of a strategy for increased dialogue with customers that also includes local surveys of 30,000 customers, qualitative surveys and a system for internal exchange.

A new organizational structure and resources

Customer satisfaction and loyalty are a core aspect of Société Générale's strategy and the Group makes constant efforts to improve its satisfaction analysis methods and the tools its uses to anticipate customer needs.

In line with this policy, the Group has appointed a customer satisfaction manager in its Distribution Network.

It has also set up a Know Your Customer (KYC) department in the Corporate and Investment Banking Division that monitors new customer relationships and regularly assesses the level of risk posed by each customer in the portfolio and their respective activity (risk-based approach).

The KYC department is now fully operational, and employs a total of 40 staff worldwide with access to a centralized database covering the Bank's entire clientele. The department provides an additional level of security to back up the risk procedures implemented by the business lines and their support services on a dayto-day basis.

The Group also places strong emphasis on the quality of its operating procedures. In 2004, all its existing ISO 9001 certifications and service certifications were renewed. The Group also

obtained new ISO certifications for CGA (Compagnie Générale d'Affacturage, the first factoring company in France to receive certification for its entire business activity), Sogessur (management of non-life policies for individuals), Sogécap (management of life insurance policies and customer services) and Société Générale Marocaine de Banques (securities business).

The security of means of payment is a constant concern for the Bank. The new Société Générale checkbook includes innovative security measures (paper, ink, graphics) designed to make falsification and counterfeiting more difficult.

Since its launch in 2004, the secure Internet payment service, e-carte bleue, has enjoyed considerable success, and now has 300,000 subscribers and a satisfaction rate of 96%.

External recognition of the quality of our relationships

—

■ Oscar for the best service to policyholders awarded to Sogecap by the magazine Gestion de Fortune.

■ Casques d'Or for the best telephone-based customer relations: 1st place for the second year running for Crédit du Nord's direct banking service, 3rd place for Société Générale. ■ Casques d'Or for the best e-mail relationship: 2nd place for Société Générale and 3rd place

for Crédit du Nord's direct banking service. ■ Named "Best Private Bank"

in France by Euromoney**.**

■ Voted "Bank of the Year" in the MasterCard Bank of the Year awards for the best financial services to individual customers in the Czech Republic (Komercni Banka).

■ Ranked 3rd in the Customer Satisfaction Awards (satisfaction rating of 80 vs. an average of 77 for the banking sector) based on surveys by Bearing Point and TNS Sofres.

(1) Self-employed professionals, tradesmen, shopkeepers and farmers.

CUSTOMER LOYALTY

Société Générale's quality approach is designed to promote customer loyalty. This is measured using two indicators: ■ the average number of products per individual customer, which rose from 7.4 in 2003 to 7.7 in 2004;

■ the average age of the products, which was 12 years in 2004 and broke down as follows: 0-5 years, 37.5%; 6-10 years, 18.7%; 11-20 years, 24.8%; more than 20 years, 19%.

CUSTOMER SATISFACTION SURVEYS (French Networks)

Customer satisfaction(Score out of 100)	SociétéGénérale2003	SociétéGénérale2004	Créditdu Nord2004	Sectoraverage2004
Individuals	71	72	74	70.7
Professionals	62	65	65	61.7
Businesses	61	65	71	62
Source: CFI Group competitive barometer, 2004.

A small and stable number of claims

Société Générale has always paid particular attention to the way it handles difficulties pointed out by its customers. Managing 40 million products for more than 5.5 million customers in France can create operating problems, which then lead to dissatisfaction and disagreements. In 2004, the ratio of errors to total current accounts remained stable on 2003, at just 0.36%.

Customers have three levels of redress: their branch advisers, the Customer Relations Department if a disagreement persists and, as a last resort, the ombudsman whom they can contact at a separate address. Mrs Christiane Scrivener, the former Secretary of State for Consumer Affairs and former European Commissioner and MEP, has been Société Générale's independent ombudsman since 1996. Customers are advised of the existence of this facility on the reverse of their account statement. The number of cases handled in 2004 was in line with the average for the last five years.

Transparent and open relationships

In 2004, French banks promised to make "banking easier for everyone". Most of the commitments under this agreement were already longstanding practices at Société Générale (for example, no fees are charged for account closures). However, the Group decided to introduce a number of additional measures to facilitate access to price information (visible public notices and price leaflets in branches, access to price lists via the Société Générale website in 2005).

As part of its strategy to contractualize all its customer relationships, Société Générale intends to send letters out in 2005 to all customers who have not yet signed an account agreement. The Bank's policy for granting loans to individual customers of the Société Générale network and the subsidiaries CGI, Franfinance and Fiditalia, includes several measures to prevent overindebtedness, primarily through the provision of transparent information and the application of limits to revolving loan

facilities for new customers, based on the history of their banking relationship.

Adapting products and services to a diverse customer base

Société Générale's customer base covers all segments of the French population (see graph). One of the Bank's strengths is its leadership position in the student market due to its highly competitive range of loans.

Société Générale has promised to make means of payment more accessible to customers who do not possess a checkbook. A commercial offering comprising an appropriate number of bank transfers, standing orders, interbank money orders (TIP) or a card with an automatic authorization is to be introduced by mid-2005. To prevent the marginalization of population groups who often do not have access to banking products, Franfinance is working with Fasst (a welfare organization for temporary workers in France), which provides the required guarantees for loan applications.

Accessibility of ATMs (*)

In France, 90% of the Group's ATMs have been adapted to meet the needs of physically disabled customers. The Group plans to ensure that all its ATMs are adequately equipped by 2006.

(*) Automatic Teller Machines.

Quality

—

—

In France, Société Générale is an active member of the AFAQ (1) environment and individual customer services certification committees (issue of ISO 9001 and 14001 certificates) and a member of AFNOR's (2) quality management standardization commission.

(1) French association for the management and improvement of quality. (2) French standards association.

NUMBER OF CASES HANDLED BY THE OMBUDSMAN

	2001	2002	2003(1)	2004(1)
Number of cases, of which:	99	106	223	173
Investments	39%	37%	57%	54%
Means of payment	17%	17%	10%	14%
Functioning of accounts	23%	23%	20%	19%
Loans	21%	23%	12%	13%
(1) Including Crédit du Nord.

BREAKDOWN OF THE POPULATION AND OUR CUSTOMERS BY MONTHLY INCOME

Société Générale customers French population Source: Operbac 2004 – CSA Institute.

SOCIÉTÉ GÉNÉRALE GROUP - 2004 ANNUAL REPORT

Responsible financing

Innovative measures to analyze an increasingly complex body of risks

A cross-disciplinary project

Established in 2004, the multidisciplinary SERA (1) project team is working to improve the socioenvironmental monitoring of financing transactions to ensure they respect our commitments (UNEPFI and the Global Compact), observe best practices (notably the Equator Principles) and take into account the recommendations of our various stakeholders. This has resulted in the following:

• the drafting of internal procedures for sales teams and for risk assessment. These procedures cover our CSR commitments, the classification of transactions according to their socio-environmental impact, the issues that need to be examined as part of a socio-environmental due diligence policy, the specific clauses to be included in the legal documentation for financing transactions, and active monitoring of the transaction portfolio;

(1) SERA stands for Socially and Environmentally Responsible Approach.

• initiatives to increase staff awareness, notably meetings with all the financing business lines concerned;
• the definition of a CSR staff training program.

In 2005, the emphasis will be on monitoring transactions, finalizing procedures and defining specific directives for the business lines, and the implementation of a training program.

The role of environmental consulting engineers

The Group's internal consulting engineers are often called upon to assist the business lines and risk analysts in assessing financing transactions. With their extensive industrial experience, they play a valuable role in determining a client's potential exposure to sustainable development risks. In cases where a transaction is deemed particularly sensitive (involving large amounts, sensitive locations, etc.), the Group may also commission an external audit.

The internal consulting engineers design specific tools for the assessment of CSR concerns, and assist the operational staff in their use:

• "environment" guides listing the main environmental risks for each sector of activity;

• an internal environmental questionnaire that serves as a diagnosis tool in the analysis of loan applications.

Sustainable development initiatives

New monitoring indicators

The Group has developed statistical indicators to monitor the following elements:

• the proportion of loans or financing transactions that complies with social or environmental assessment rules;

• the proportion of commitments in sectors classified as sensitive by the majority of ethical funds. The sectors analyzed are gambling, tobacco, alcohol and weapons;

• the volume of "green" financing (wind farms, cogeneration plants, water and waste treatment, public transport).

The financing of fair trade

—

In 2003, the Commodities Finance Department authorized a EUR 300,000 line of credit for Alter Eco, one of the pioneering

fair trade brands in the retail sector. Alter Eco purchases commodities from 24 farm producers'

organizations located in 18 emerging countries, notably Sri Lanka, India, Thailand, South Africa, Ethiopia, Palestine, Bolivia, Cuba and Brazil.

The loan facility enables Alter Eco to finance its stocks in Europe and pre-finance small producer cooperatives that have limited access to traditional sources of funding.

More than 50%

of the total number of structured finance projects in 2004 were evaluated beforehand to determine social and environmental risks —

Less than 1,1%

of financing concerns high-risk sectors (outstanding loans at end-2004) —

Environmentally-friendly financing

Société Générale is strongly involved in the field of environmentally-friendly financing, and has helped to fund a number of significant projects.

Wind farms

The Group financed two wind farms, les Éoliennes de la Haute-Lys and les Éoliennes de l'Argonne/Côtes de Champagne, in the amount of EUR 77 million and arranged the financing of a further EUR 15 million for the projects. The two farms have a combined turbine power of 74 MW and an annual output of 200,000 MWh. Crédit du Nord also financed an 11 MW wind farm at Saint Simon, which came on stream in 2004 and generates an annual output of 20,000 MWh.

These three projects account for nearly one-third of France's total wind energy (260 MW in June 2004).

Waste-to-energy facilities

The main assets financed by Société Générale in 2004 include:

• household waste incineration plants in Nîmes (operated by Onyx) and in Rambervillers (50% Onyx - 50% Novergie) representing total financing of more than EUR 100 million (Société Générale financed over 65%);

• a 50 MW cogeneration plant that is being built by Siram (Dalkia Group) in Italy to supply steam to the Cartiere Paolo Pigna (CPP) paper mills. Société Générale is financing the project in the amount of EUR 58 million, as sole arranger and lender.

Transport

The Group also finances clean transport projects (see local government financing on page 60), through Sofergies. Total outstanding Sofergie loans currently amount to some EUR 330 million.

Infrastructure and export

finance in emerging countries Société Générale finances capital goods and infrastructure projects that will potentially boost the economic development of emerging countries. For example:

• financing of the extension of the Santiago de Chili metro system in the amount of EUR 200 million; • financing of the construction

and launch of the Skikda power station in Algeria (825 MW) in the amount of USD 382 million. All applications submitted to an

ENVIRONMENTAL AND SOCIAL RISKS

OECD export credit agency are first examined to determine their environmental impact. Applications totaling more than 10 million SDR (1) or for projects located in "sensitive" areas are classified using a system similar to that employed by the World Bank.

(1) Special drawing rights, the IMF's accounting currency.

EUR 552 million

of "green" financing granted in France in 2004

—

• A COMPONENT OF CREDIT RISK, if a counterparty's activities are exposed to social and environmental risks (withdrawal of operating permit, fines, obligation to clean up pollution); ■ THE POSSIBILITY OF A DIRECT LOSS;
• INDIRECT RESPONSIBILITY (image risk), in the case of transactions with counterparties that show little regard for sustainable development or workers' rights.

Responsible products

An offering that takes into account the concerns of our customers

A responsible approach to investment

SG Asset Management has been a shareholder in Vigeo since the agency was formed. In October 2004, it acquired a stake in Ethix SRI Advisors, an SRI consulting and monitoring company based in Stockholm, placing itself in a key position in the SRI market with access to top-level information.

Socially responsible investment aims to take into account other criteria of value-added for investors, over and above the usual requirement for financial returns. SG Asset Management analyzes some 500 major stocks on the basis of social and environmental considerations, and offers a variety of investment approaches. Its specialist teams in France and the United Kingdom manage a large number of mandates using SRI strategies that vary according to the country where the client is based: the United States and Netherlands, for example, prefer positive and even negative screening, whereas, in the United Kingdom, the emphasis is on shareholder activism (or shareholder advocacy). In France, investors tend to opt for a positive screening approach.

In its domestic market, the Group generally applies an SRI approach on a bespoke basis, in response to a specific request on the part of a client for a management mandate or a dedicated fund. However, it also offers three SRI funds for the general public: SGAM Invest Développement Durable, and Etoile Partenaire and Etoile Environnement, both managed by Crédit du Nord. SRI criteria are also used in the Arcancia Label range of employee savings funds, the first retirement savings funds in France to be officially classified as socially responsible in 2002 by the CIES (Intercompany Employee Savings Committee).

SGAM Private Equity also invests in socially responsible vehicles (investment funds, funds of funds, etc.) as part of a discretionary management service for clients with high standards of corporate governance and ethics. The company looks for longterm, profitable investments in areas such as biotechnology and technology for the preservation of the environment, paying close attention to sustainable development issues. It has set up an internal ethical committee and various scientific committees with the participation of recognized specialists, to define and maintain its policy, and carries out external audits where necessary to assess the issues at stake.

Developing microfinance

The microfinance industry offers financial services (loans, savings, insurance) to small entrepreneurs who do not have access to the traditional financial system. Microfinance Institutions (MFI) are subject to specific legal and tax regimes, and frequently receive subsidies from international organizations.

Société Générale makes a significant contribution to the funding of institutions through its subsidiaries in Africa and the Mediterranean Basin. In 2004, the Group provided loans totaling several tens of millions of euros to MFI in Benin, Cameroon, Jordan and Morocco. On the strength of these experiences and the favorable feedback it has received, the Bank has decided to step up its initiatives in the microfinance industry.

INNOVATIVE CHARITY PRODUCTS

Profit-sharing fund

Société Générale has offered a profit-sharing fund, Conciliance, since 1996. The fund enables customers to donate all or part of the income generated on their savings to one or more charities from a list of twenty organizations (total assets under management of EUR 5.3 million at December 31, 2004).

Customer loyalty and charitable giving

Under the Jazz loyalty scheme, customers contribute EUR 0.25 to charity for every gift they order. Société Générale has chosen to donate the proceeds from this scheme (EUR 100,000 in 2004) to Handicap International.

Relationships with our suppliers

Transparency and professionalism

Société Générale aims to leverage its purchasing policy to encourage the adoption of responsible social and environmental practices in the wider community.

In 2004, the Purchasing Department was officially recognized by two non-financial rating agencies, Vigeo and SAM, for its innovative practices in this field.

Each quarter, the Department carries out an internal review to assess its progress in sustainable development issues. It also takes advantage of any major internal gatherings and events to raise awareness among its staff, and disseminates information through all available communication channels: intranet, internal newsletters, etc.

Outside the Group, it shares its concerns and expertise with other companies through professional gatherings, such as ORSE (1) workshops and meetings of the CDAF (2).

The Purchasing Department has set itself a number of targets for the coming years: consolidation of the initiatives already implemented, promotion of the use of "green" fuel for its vehicle fleet, collection of expired bank cards, increase in the use of renewable energy and recycled paper, etc.

Inclusion of a CSR questionnaire in all calls for tender

The Group requires all potential suppliers to fill in a CSR questionnaire to assess their practices, and issues them with a list of its own commitments with respect to human rights, labor rights, the environment and the prevention of corruption.

Since 2003, new contracts with suppliers have included CSR clauses and, in 2004, the Group carried out an initial audit to review and update existing agreements.

(1) French national observatory for corporate social and environmental responsibility. (2) French association of managers and purchasers.

More environmentallyfriendly purchases

Each year, the Group examines different areas of its purchasing policy to find ways to improve its contribution to the environment. Its initiatives for 2004 included the following:

• increase in the proportion of "green" electricity (produced from renewable sources) purchased from EDF for Tour Société Générale from 15% to 21%;

• launch of a debit card that consumes less chlorine;

• general implementation of a recycling policy for electronic and IT equipment at the end of its useful life (refer also to the chapter on the environment).

Total purchases of EUR 3.5 billion

—

700

new contracts now include socio-environmental clauses —

All Purchasing Department staff have received training in sustainable development issues —

Local development and corporate sponsorship

Playing an active role in local development

Development policy in Africa and Eastern Europe

The existence of a reliable and efficient financial system has always been one of the key factors in the development of a country.

Through its extensive international retail network, Société Générale has a strong and, in some cases, long-standing presence in three major geographical zones (see page 84), enabling it to leverage its strategy to foster sustainable economic growth in developing countries.

The Group is pursuing a targeted policy of growth in Africa and Eastern Europe, gradually expanding its range of products and services to meet the needs of local firms and individuals, and thus making an active contribution to the economic development of its customers.

In some cases, the Group's role extends beyond the provision of traditional banking services – in certain countries it distributes the salaries of civil servants and manages the payment of state pensions to retired workers who do not have access to a bank account.

Thanks to this growth strategy, and to the work of its 27,000 employees who share its values of loyalty and innovation, Société Générale has succeeded in multiplying its customer base in Africa and Eastern Europe by seven over the past six years.

Local development policy in France

Société Générale works to promote economic development at local level in France, through a number of initiatives:

• Financing of local governments, notably for infrastructure and clean transport projects (EUR 62 million for Mulhouse's urban tramway system, financing of buses that run on natural gas and of household waste treatment plants in Nîmes).

The Group's financing commitments in France totaled EUR 7.4 billion at December 31, 2004.

• Health sector financing, particularly for hospitals: public hospitals in Lyon, Grenoble, Fécamp, Meulan les Mureaux, and establishments for the mentally and physically handicapped.

• Financing of associations: Société Générale has a market share of over 10%. The associations are supported by a dedicated team at the Group's head office, and by local contacts at the branches. The Group has forged close links with national charity organizations such as Secours Catholique, Secours Populaire, the Salvation Army and the Fonds Social Juif Unifié. • Support for business start-ups: In 2004, Société Générale continued its initiatives to help new businesses (see below). Our factoring subsidiary, CGA, also markets a range of products specifically designed for micro enterprises and new companies. • Increased synergies with the two support networks that Société Générale partners: managers are spearheading the training initiatives of CCI Entreprendre en France and are also involved in 30% of the 230 local initiative platforms established by France Initiative Réseau (FIR).

• Loans to apprentices to allow them to complete their training.

Sustainable development project in Cameroon

—

Société Générale de Banques au Cameroun (SGBC) has signed a partnership agreement with an NGO to support the major Garoua elephant camp project. The aim is to enable local populations to remain in close proximity to the Bénoué National Park (a protected biosphere region classified by UNESCO in 1981), without endangering the ecological balance of the region. The program is encouraging the elephant population to return to the site and is carrying out research into the region's wildlife. SGBC is conducting a national awareness campaign to highlight the work of the program.

BUSINESS START-UPS

• RELATIONSHIPS ESTABLISHED with 21,388 business start-ups in 2004 (December 2003 to November 2004)
• MARKET SHARE of 10.4%
• PORTFOLIO of 65,514 companies less than three years old at November 30, 2004
• THE LIFESPAN of these companies is higher than the national average

Group charity work

In 2004, Société Générale continued to follow through its existing charity policy.

Encouraging the involvement of Group employees

With additional backing from Société Générale and a steady rise in its membership, Talents et Partage, the independent charity association set up by existing and retired Group employees, was able to make significant increases in both the number and volume of its donations (see opposite).

The projects sponsored by present and former staff focused primarily on disadvantaged children, the disabled and social integration. This approach has also been adopted in other countries such as the Czech Republic, where the Jistota Foundation has helped finance equipment and care units for various hospitals in the country.

Moreover, an amendment has been made to the 35-hour week agreement under which staff using their Time Saving Account to take solidarity leave (1) are given

(1) Under this system of exceptional leave, staff can take up to 2 years off and are entitled to at least 4 months' pay.

an extra 10% time off, up to a maximum of 10 days.

Promoting solidarity through our foreign subsidiaries

The Group's foreign subsidiaries are the best-placed to identify and target local needs. In Africa, they have set up a number of important projects, such as the provision of aid to a Liberian refugee camp in Ghana and the financing of 200,000 dictionaries for secondary school children. The subsidiary in Cameroon has signed an agreement with an NGO (see page 60) and established a partnership with a local hostel involved in the protection of street children. In Madagascar, the subsidiaries are financing an orphanage and have signed a 3-year partnership agreement with an association for the mentally handicapped. Similar initiatives have also been taken up in the Middle East (e.g. partnership with "Help Lebanon" to renovate neighborhoods in difficulty), and Europe (sponsorship of the Fondation Samu Social which helps the homeless in Romania, etc.).

Reinforcing our role in France with new partnerships

In 2004, the Group continued its work in its four main target areas: children, the disabled, health and social and economic integration: • establishment of a partnership with UNICEF for "My first account": the Group donates 1 euro to UNICEF for each account opened by an under-18 (December 2004 – February 2005);

• financing of the Association des Paralysés de France for its advertisement on TF1 on national "smile" day (Offrez-vous un sourire!);

• financial backing for UNAPEI's photography exhibition (Jeux de Miroir sur le handicap);

• donation to the Fondation de la deuxième chance (social integration);

• financial support for the Assises nationales de la cancérologie organized by the Ligue nationale contre le cancer.

Aid for victims in southern Asia —

Following the tidal wave in December 2004:

■ the Group donated

USD 1 million to the Red Cross;

■ Talents et Partage dispatched emergency aid to Indonesia;

■ the Asian subsidiaries collected donations from employees, which were matched by the Group.

Talents et Partage —

In 2004, the charity association supported over 50 projects with financial donations, contributing a total of EUR 250,000 compared with EUR 100,000 in 2003. At the same time, it donated computer equipment no longer used by the company to some 25 projects. Two-thirds of these initiatives concerned developing countries (Cambodia, Nepal, Haiti and African countries). Talents et Partage also runs its own volunteer programs (toy collections, food bank, etc.).

SOCIÉTÉ GÉNÉRALE GROUP - 2004 ANNUAL REPORT

Sports partnerships and cultural sponsorship

Sports partnerships

In 2004, Société Générale continued its work with a number of sporting federations to promote the popularity of their disciplines. The Group chose to extend its 17-year partnership with the French Rugby Federation until 2008, building on shared values of solidarity and team spirit, and in 2007 will support the French XV in the Rugby World Cup in France.

Société Générale has officially partnered the French Golf Federation since 2001, and works to promote the sport, notably with young people (Trophy for golf schools, etc.).

The foreign subsidiaries also provide backing for a range of sports, chosen to reflect local preferences. The Banque Roumaine de Développement (BRD), for example, renewed its partnerships with the Romanian rugby and tennis federations, while in Slovenia, SKB is a partner of the Slovenian Olympic team and Olympic committee. In the Czech Republic, Komercni Banka supports the Handisport Federation.

In France, the Group also renewed its partnership with the French Bridge Federation for a further 4 years and strengthened its initiatives to attract more young people to the field.

Music sponsorship

Throughout the year, Société Générale continued its work to promote music, organizing a series of 29 public concerts in Paris and the provinces (la Tournée générale – Un mécène en fête!) to raise public awareness of the role of the association, Mécénat Musical Société Générale (MMSG). The concerts gave a number of young artists and music groups the opportunity to perform in front of more than 20,000 people.

MMSG has also signed two new partnership agreements: one with the new Philharmonic Chamber Orchestra, directed by Emmanuel Krivine and comprising musicians from different European countries, the other with the Accentus choir, aimed at reinforcing MMSG's support for contemporary music.

The Group's foreign subsidiaries are similarly committed to a policy of cultural sponsorship, and have set up partnerships with the Bolshoi Theatre in Russia, the National Theatre of Prague in the Czech Republic and the Beiteddine Festival in Lebanon.

Modern and contemporary art

In 2004, Société Générale focused on renewing its collection and making art more accessible to the general public. It established temporary partnerships with the Musée des Beaux-Arts in Bordeaux and the Art-Paris contemporary art fair that will allow the public to discover some of the works in Société Générale's contemporary art collection. Over the year, the Group acquired a number of new works by contemporary artists to enhance the collection built up during the 1990s.

The Group also organizes regular conferences on modern art for its employees, and arranges private viewings of exhibitions for its customers (through the partnership with the Connaissance des Arts magazine).

Golf: the French Open Golf Championship

—

—

In 2006, the French Open Golf Championship, one of the major European professional tournaments, will celebrate its centenary. Société Générale became an official partner of the tournament in 2004 asserting its reputation as France's "Golfing Bank".

Partnership with the Handisport Federation

Through its partnership with the French Handisport Federation, Société Générale and its Greek subsidiary were able to support the French athletes at the Athens Paralympic Games. However, the Group's support is not aimed exclusively at top-level athletes. Société Générale is also helping members of Handisport and its affiliated clubs to overcome their handicap and set up their own projects.

CONTRIBUTIONS TO CHARITY AND CULTURAL AND SPORTS SPONSORSHIP (excluding operating expenses)

(In millions of euros)	2002	2003	2004
Charity	1.6	2.2	2.3 (1)
Culture	2.0	2.3	2.6
Sports partnerships	4.5	6.0	7.7 (2)
Total	8.1	10.5	12.6

(1) Excluding donations to victims of the Asian tsunami.

(2) Including EUR 1.1 million for non-French sports partnerships since 2004.

Working to protect the environment

The direct environmental impact of the banking sector remains relatively modest compared with that of the industrial sector. However, over the past few years, Société Générale has taken steps to identify and control its use of natural resources.

Extension of our environmental reporting system

In 2004, the consumption of energy, water and raw materials and the production of waste were monitored at nearly all the Group's domestic offices and subsidiaries, and in a number of foreign countries: Germany, Spain, US, UK, Hong Kong, Italy, Japan, Czech Republic and Romania (see NRE appendix on p. 300). Furthermore, the Group defined 15 indicators to evaluate its direct environmental impact, as part of a formal reporting system.

The first Greenhouse Gas (GHG) Emissions Assessment

In line with its commitments, Société Générale commissioned its first GHG Emissions Assessment at its central offices from October 1, 2003 to September 30, 2004. Conducted by an external specialist using the methods defined by Ademe (1), this detailed analysis looked at actual consumption over a broad scope of activities, including depreciation and deliveries (2).

Although further limited cuts can still be made in GHG emissions and energy use, it was clear from the assessment that the Group has already adopted a number of commendable practices: increased use of remote conferencing equipment such as video-conferencing, timer switches on lights and computer equipment, etc.

The main area for improvement now is transportation (accounting for 36% of total emissions), where business trips could be reduced and cleaner forms of transport used.

Practices to control the use of natural resources and production of waste

Over the past decade, the Group has implemented a number of techniques to moderate consumption of resources at its central offices:

• central offices and network branches are equipped with thermal regulation devices;
• since 1995, the Group's IT centers have introduced systems to reuse the heat given off by computer equipment, and now cover 95% of their heating requirements, saving 6.5 GWh of energy per year;

• since 1997, the Group has developed a formal system for managing its waste production, monitored by a dedicated department.

(1) Ademe: Agence de l'Environnement et de la Maîtrise de l'Énergie (Environmental and energy management agency). (2) Depreciation of buildings, fixtures and fittings, IT equipment and vehicles, over their accounting life (20 years, 5 years, 2 years).

GHG EMISSIONS ASSESSMENT OF THE MAIN CENTRAL OFFICES

Staff concerned (no. of occupants)	8,695
GHG emissions in CO2 equivalent (tons)	7,835
GHG emissions per occupantin CO2 equivalent (kg) (excluding catering)	901
Portion of emissions linked to transport(journeys to and from work and business travel)	36%

23%
22%
14,736,716
71,946,576

SOCIÉTÉ GÉNÉRALE GROUP - 2004 ANNUAL REPORT

For the past five years, all installations at the French Networks have been covered by maintenance contracts, managed centrally by Corporate Services or at local level and designed to extend the life of existing equipment. Guidelines were issued in March 2003 to optimize the use of climate management installations by harmonizing the techniques and equipment used and increasing their reliability.

In waste management, the Group established new directives in 2004 on the recycling of fluorescent tubes, and has taken further steps to reduce paper consumption (internal publications were cut by 18% in 2004 or some 9 million pages). Moreover, regular reminders are issued to staff encouraging the use of recycled paper for internal documents.

Eco-friendly practices are also being adopted by the Group's foreign subsidiaries:

• in 2004, SG CIB Australia set up a program to recycle printer cartridges;

• SG Hong Kong has installed automatic curtains to reduce energy consumption.

Innovative measures to protect the environment

Renewable energy sources

Société Générale remains committed to the use of renewable energy and has signed a new contract with EDF, applicable from June 1, 2004, to ensure that 21% of the electricity for Tour Société Générale comes from "green" sources. Under this agreement, some 11 GWh of a total annual consumption of 54 GWh will be derived from renewable sources (wind, solar, wave, biomass energy, etc.).

The Tour Granite project: an HQE building

Société Générale is currently working on the construction of a 180m tower, with 68,000m2 of office space, that will blend in with the existing Tour Société Générale at La Défense and with the urban landscape of neighbouring Nanterre. Designed by the architect Christian de Portzamparc, these new premises represent a major architectural challenge as they are being built in compliance with the new HQE standards (Haute Qualité Environnementale, or high environmental quality) established by the CSTB (1). This process requires that three audits be carried out at the planning, design and construction stages in order to guarantee that the project meets environmental regulations. Société Générale has also set specific objectives in terms of environmental impact and innovation for this building, focused around five themes: air quality, hygrothermic conditions, visual aesthetics, energy savings, soundproofing. Other issues which have an impact on the internal and external environment will also be monitored as part of the project, notably the quality of the actual building site and the materials and techniques used in construction.

(1) CSTB: Centre Scientifique et Technique du Bâtiment (Scientific and technical center for building construction).

ECO-FRIENDLY PRINTING

Société Générale's printing and routing centers in France have implemented a detailed program of measures designed to reduce their environmental impact:

■ installation of storage tanks for effluents classed as "special waste", generated in the production of microfiches, and monitoring of the quality of waste water;

■ use of completely recyclable envelopes (including the plastic windows) for the 120 million account statements sent out to customers each year;

■ use of electronic files to replace the films produced by our graphic designers and sent to printers;

■ discontinuation of the print-out of 1.1 million electronic customer files per year.

Human resources

A diversity of talent working to achieve collective success

GEOGRAPHICAL DISTRIBUTION OF GROUP STAFF Proportion of women as a %

As a result of the increasing specialization and internationalization of banking activities over the last two decades, and the Group's sustained acquisition policy since 1997, Société Générale has had to make radical changes to its human resources management. Total headcount remained stable up until 1997, but subsequently doubled in the space of just 6 years, while the proportion of employees based outside France rose sharply to account for nearly 50% of the overall workforce. Although the actual proportion of female staff varies from one country to another, women now represent over 50% of total headcount. Faced with this diversity of cultures, skills and profiles, the Group's Human Resources department (HR) has successfully adapted its policies to provide adequate support and career management.

Working to promote a common strategy

A dynamic Group

Increased numbers of new recruits

The Group took on a total of 7,750 new employees in 2004, representing a 25% increase on 2003. Around 70% of these employees are on permanent contracts and 54% are female. The majority of new recruits joined the Retail Banking Networks both in France and abroad (71%), and the Corporate and Investment Banking arm (17%). The Group has adopted an active recruitment policy to support its expansion and renew its staff and skills, which it tailors to suit its different businesses, activities or geographical regions.

In the Corporate and Investment Banking division the number of hirings tends to reflect the economic context. The emphasis here is on attracting candidates with suitable profiles (e.g. experts in niche markets), notably in Europe, and on securing the loyalty of employees who are particularly sensitive to overall remuneration levels. The Global Investment Management and Services division (GIMS) faces a similar challenge.

The Retail Banking division needs to deal with a variety of issues, depending on the activity and location of the business: balancing the age distribution of staff, renewing and training staff to accompany the reorganization of the French Networks, integrating staff

■ PROXIMITY ■ RESPONSIBILITY ■ PERFORMANCE

6 PRINCIPLES OF HR MANAGEMENT:

■ RECOGNITION ■ DEVELOPMENT ■ MOBILITY

92,000 employees

of which 51% are female —

7,750 new recruits in 2004 —

7,630 trainees —

SOCIÉTÉ GÉNÉRALE GROUP - 2004 ANNUAL REPORT

Human resources

from recently acquired foreign entities and encouraging loyalty. The corporate departments have a policy of recruiting experienced candidates, experts (mainly in IAS and Basel II) and young executives. In France, where the employment climate is currently mixed, Société Générale remains one of the leading recruiters, taking on 2,360 new employees on permanent contracts and 945 on fixedterm contracts (1). In 2004, the Group continued to recruit young people on work-study contracts and maintained its partnerships with higher education establishments (Bac +2/3 and Bac +5). Société Générale has an excellent reputation as an employer (2) and pays close attention to the quality and diversity of its new staff.

A rising headcount to keep pace with the expansion of the Group

The Group has increased its human resources to accompany its expansion and international development (including the acqui-

(1) Including 769 on qualification and apprenticeship contracts. (2) Annual TNS SOFRES survey of young graduates in France.

sition of the General Bank of Greece in the first half of 2004). However, in 2004 it was forced to reduce its headcount slightly at certain subsidiaries due to the local market environment. Nonetheless, overall redundancies fell sharply to a total of 850 in 2004 (less than 1% of the total workforce) compared with 2,173 (including 1,589 economic redundancies) in 2003. The international retail banking arm was worst affected by economic redundancies, with 172 out of a total of 352 departures (mainly in eastern Europe), followed by the Corporate and Investment Banking division with 92 redundancies (mainly in the United States, United Kingdom and Japan).

In France, Société Générale and Crédit du Nord saw 648 retirements and nearly 1,000 departures under the CATS (3) agreement. Retirements at Société Générale are expected to peak in 2009 and 2010, with around 2,000 departures per year, representing 5% of the workforce.

(3) Cessation d'Activité de certains Travailleurs Salariés, the Group's early retirement agreement, which enables employees who meet certain conditions to leave the company on a suspended contract until their official retirement age.

4D Program

—

2004 saw the first concrete results of the 4D program to restructure the domestic retail banking platform.

The following departments are now operational:

■ 18 Customer Service Units (PSC), which group together the backoffice functions of several Sales Divisions (DEC) and employ a total of 2,630 staff;

■ 54 DECs, with new organizational structures and new functions;

■ 4 multimedia Customer Relations Centers (mCRC) in Lyon, Lille, Nanterre and Marseilles for direct banking services.

DISTRIBUTION OF EXPATS AND INTERNATIONAL EXECUTIVES BY GEOGRAPHICAL ZONE AND BY DIVISION

150 International Company Volunteer Programs (VIE) —

250,000 CVs received, nearly 50% via the recruitment

website —

GEOGRAPHICAL BREAKDOWN OF RECRUITMENTS 10%

The Group currently operates in nearly 80 countries and employs 92,000 staff, 45% of whom are located outside France.

HR, partners in the Group's growth

A strategy based on Group principles

The HR teams support the development of the Group by responding to any changes in the activities, needs and expectations of its entities and employees. Their work is based on two fundamental Group principles: consistency and subsidiarity. In other words, the HR function aims to apply consistent policies throughout the Group in employment, remuneration, training, social policy, and provide a central pool of resources through the Group HR Department, while at the same time maintaining decentralized HR departments within each division to implement specific individual and collective strategies.

Strong results achieved through team work

In 2004, the Human Resources department began testing a new initiative entitled "HR Performance", designed to improve HR services. Under this scheme, individual HR staff and managers are set personal priorities and focuses for improvement, and are subsequently monitored through a personal performance plan to assess their results. The tests were conducted at ten pilot sites in 2004, covering the full range of the Group's activities in France and abroad, and should be extended to 37 entities in the first quarter of 2005.

New accounting standards and HR management

Also in 2004, the Group implemented a major project to formalize its social commitments and share-based payments, in order to integrate the regulatory requirements of IAS 19 (employee benefits) and IFRS 2 (share-based payments), and establish a coherent HR policy. In line with the new international accounting standards, the Group conducted a complete review of its existing commitments and ensured it had adequate provisions to cover future benefits.

Shared interests: cohesion and personal development

Creating a sense of cohesion

Reflecting the diversity of the societies and countries where we operate

Société Générale regards staff diversity as a key ingredient for creativity and competitiveness. To assert this commitment, it has adopted the Charter for Corporate Diversity put forward by the Institut Montaigne in France (see page 43 "The Group's commitments").

It has also signed an agreement with the ANPE (French national employment agency) to promote a recruitment policy that reflects the diversity of French society. Under the agreement, Société Générale has agreed to consider applicants for positions as bank cashiers or multimedia customer advisors regardless of age, profile or qualifications, provided they can demonstrate prior experience in a commercial or customer service role. In 2004, a total of 55 employees were recruited under this initiative.

Using our pool of talent to generate synergies abroad

The HR department specifically encourages international mobility for staff in order to strengthen cohesion in the Group's foreign operations. A total of 700 French nationals and 135 international managers have been relocated to other countries across the world, more than half in Europe, where they share their skills and experience.

Employees operating outside their home country also help to foster a sense of belonging among local staff. They are effectively ambassadors promoting Société Générale's corporate culture and core values.

Integration: a major challenge

The Group is actively working to promote the cultural and professional integration of its new employees through integration seminars. In 2004, 1,093 executives from the different Group entities (including 33% from abroad) attended the integration seminar in Paris where they were given an insight into the diversity of activities, cultures and age groups that contribute to the Group's performance.

INTEGRATION SEMINAR FOR THE INTERNATIONAL RETAIL BANKING NETWORK

Launched in April 2002 for some 20 staff, in order to train rising talents at Group subsidiaries, the integration seminar is now a 3-day event, held five times a year and attended by 45 participants. Trainees are also given the opportunity to visit Group business centers either individually or in groups (France Networks and Corporate Departments). In 2004, a total of 144 employees took part in these initiatives.

SOCIÉTÉ GÉNÉRALE GROUP - 2004 ANNUAL REPORT

Human resources

The seminar provides a platform for dialogue between managers and employees, and encourages staff to develop their own network of contacts. It is frequently supplemented with "open days" organized by the different business divisions. SG CIB, for example, held events for 320 staff, including 50 from abroad, while the Retail Banking and Financial Services division held an integration day for nearly 580 managers (44% female).

Mutual ambitions

Société Générale actively seeks to impart the Group's strategy, objectives and core values to its managerial staff. Each year it organizes a one-day "managers' conference" for up to 2,000 executive staff, and at the end of 2004, the General Management also held a conference for 235 managers, including 45 women and 42 foreign managers, reflecting the diversity of the Group.

Implicating staff in the performance and results of their Company

Employees are entitled to variable remuneration in the form of share ownership and profit sharing schemes, which are tied to the overall level of Group results. Under the Société Générale scheme, the total profits to be shared are calculated as a percentage of the gross operating income for the period, weighted according to the change in activity indexes. Employees then receive a share of this profit which is proportional to their basic salary. Société Générale employees can invest their share of the profits in marketable securities under the Company Savings Plan (PEE), which offers excellent financial terms and tax benefits. They can choose from 4 mutual funds, one of which is invested in Société Générale shares. The company makes an additional contribution to the fund on behalf of employees choosing to invest. In 2004, a total of EUR 48.1 million in profits was distributed to staff, and EUR 236.7 million was invested in the Company Savings Plan, EUR 172.3 million by employees and EUR 64.3 million by Société Générale as an additional contribution.

Competitive levels of remuneration

The Group operates in a variety countries, markets and businesses, which each have their own standards and practices in terms of remuneration. In order to cater for this diversity, the Group is developing remuneration systems that are suited to each context, but based on a number of shared principles and practices applied in all entities:

• an attractive salary that recognizes individual and collective performance, and is tied in with overall Group results in order to increase staff motivation and commitment;

• a level of remuneration that is competitive in the economic, social, legal, fiscal and cultural context of each country and entity, and that is in line with the business plans and targets of each core business, based on regular market surveys.

2004 Global Employee Share Ownership Plan —

Since 1987, Société Générale has actively encouraged staff to become shareholders, as part of a policy to tie their interests in with those of the Company. The strategy is based on the core values of professionalism, team spirit and innovation. Since 2003, the Group has broadened the scope of its capital increase reserved for employees and former employees of Société Générale France and Crédit du Nord, to cover 160 entities in 47 countries. 56% of the 97,000 eligible employees actually subscribed to the capital increase, including 68% in France (Société Générale and the French subsidiaries) and 35% abroad.

5.2 million new shares were created and EUR 302.9 million was invested (vs. EUR 292.1 million in 2003) (1). More than 60,000 employees and former employees worldwide are now shareholders of Société Générale accounting for nearly 7.5% of the share capital at end-2004.

(1) Profit-sharing: EUR 59.2 million. Voluntary employee contributions: EUR 163.8 million. Additional company contribution: EUR 79.8 million.

INTEGRATION OF HANDICAPPED WORKERS

The Group currently employs 1,649 handicapped people worldwide. In France, Société Générale continues to work actively with an enterprise agency to retain and recruit disabled staff. The Group employs more than 1,000 people registered with

Cotorep* or receiving disability benefit and continues to encourage the use of Centres d'Aide par le Travail (centers offering tailored solutions to enable handicapped people to work) for activities such as mailing, the production of welcome packs, etc.

* Commissions Techniques d'Orientation et Reclassement Professionnel (technical commissions for career orientation).

The competitiveness of each remuneration package is determined by looking at all its constituent parts (fixed, performance-linked, individual and collective salary, medical insurance, savings, pensions, etc.); • a regular review of each employee's remuneration to ensure it is in line with his/her qualifications, performance and the benchmark for the market.

Individual development

Personal performance appraisal and support

Société Générale's collective performance is strongly dependent on its ability to develop the individual skills of its employees. HR has responded to this challenge by incorporating a number of key tools into its career management strategy, notably personal performance appraisals. These take the form of one-to-one evaluation meetings between the employee and his/her manager.

The Group has also decided to extend the "Performance and personal development" program which was already offered to 1,200 executive staff in 2003. Under this system staff are given specific performance and development targets, and then monitored to assess their results.

Similarly, in 2004, the Corporate and Investment Banking division introduced an online system, eappraisal, to facilitate communications between executives, their line managers and the HR department for the preparation and monitoring of performance appraisals.

Career management: an open, dynamic and forward-looking policy

Société Générale has built its success on the skills of its employees and on their ability to adapt. As a result, it places strong emphasis on career management based on close collaboration between employees, managers and HR specialists.

One of the ways in which it encourages the development of its staff is through career mobility, by offering opportunities for transfers to other geographical locations, functions or Group entities. This strategy enables employees to maintain and enhance their skills, adding to their own professional development while at the same time contributing to the collective performance of the Company. Career mobility also encourages the integration of new employees and entities, helping to build a strong sense of internal cohesion. In view of the diverse profiles of the Group's employees, businesses and entities, staff mobility takes a number of different forms and the policy is only implemented if it is appropriate for both the company and the employee. More than 5,200 Société Générale employees changed jobs in 2004.

The Group is also extending the use of career committees for executive staff, notably in newly acquired entities. These committees comprise both managerial and HR staff, and have a twofold function:

• they meet to discuss the skills, performance, desires and potential of each employee, in order to define an appropriate career path, notably for staff with strong potential;

• they identify potential succes-

sors for key managerial staff, and identify the strengths and weaknesses of each entity in terms of human resources, thus helping to control its operational risks.

In 2003, the Group began setting up a branch HR system to cover specialized support functions such as IT, finance, risk and HR. In 2004, it backed this up with the creation of cross-disciplinary career committees, specific skill development initiatives and new methods and tools.

One of the key objectives for 2005 is to reinforce this strategy and define relevant career paths.

Developing the skills of employees

Société Générale has a strong tradition of investing in employee training. The annual training budget for France alone amounts to over EUR 50 million. In 2004, two thirds of the total workforce, or over 61,300 employees (of which 54% were female) took at least one course, representing a total of 2.1 million hours.

Since 2004, Société Générale employees in France have been able to access a list of training

SOCIÉTÉ GÉNÉRALE GROUP - 2004 ANNUAL REPORT

Human resources

courses directly through the HR Self Service intranet application. The Group also encourages internal promotion in recognition of the additional skills acquired by employees and any changes in their responsibilities.

Nearly 4,000 Société Générale staff in France changed grade (1) in 2004, representing more than 10% of the workforce.

The Group also offers employees the chance to enroll on in-house training courses, Cursus des Techniciens de la Banque TMB et Cadres, in order to advance their careers.

• In 2004, 202 candidates registered for the Cursus TMB, including 107 female staff. 97% of these candidates were French Network employees.

• The Cursus Cadres is a 2-year in-house course comprising a preparatory phase, during which the candidate completes an assignment, and a training phase consisting of 3 modules: sales and profitability, team and project management, and risk analysis.

(1) Classification specified in the collective bargaining agreement for the banking industry. Out of the 235 employees who registered for the course in 2004 (including 127 female staff), 38% passed, receiving a qualification that entitles them to apply for a managerial position.

For its managerial staff, the Group has implemented a crossdisciplinary training program entitled "Build on diversity", and various courses for different managerial grades.

In France, 1,700 employees have attended at least one of the 26 managerial development programs.

The Group is also starting to introduce individual coaching for managerial staff. This approach encourages participants to become more self-reliant and assume greater responsibilities, within a strict framework of compliance.

Training the next generation of managers

More than 110 employees attended the "Future Senior Managers" program. Introduced in 2002, the program assesses individual management practices and identifies areas for improvement. The Group offers career development and training programs specifically for this purpose. The program is also designed to meet collective needs, such as change management – in the latest session in Prague, the Group focused on the case of Komercni Banka as a successful example of change management in the context of a merger.

Taking on board changes in the expectations of our staff, beyond the requirements of an "employer/employee" contractual relationship

In 2004, as every year, Société Générale carried out a social environment survey of 1,400 employees in France, with the help of a specialist external company to ensure confidentiality. The Group uses the main findings to make appropriate changes to its social policies.

Fostering social dialogue

The Group is working to promote effective social dialogue. It signed some 100 agreements in 2004, including 15 agreements or

Paid leave: innovative measures

—

In March, Société Générale signed an amendment to its 35-hour working week agreement to simplify the management of paid leave. The periods when annual leave is acquired and can be taken have been aligned with the calendar year, as for RTT days (extra days off under the 35-hour working week). The amendment also makes the "Time Saving Account" (CET) more flexible so that days can be used as holiday, exchanged for pay or used to work part-time. Moreover, the Company grants additional leave for those using their CET to work for a good cause (for a charity or association).

SIDA ENTREPRISES IN CAMEROON

In 2003, Société Générale's African subsidiaries joined the association SIDA ENTREPRISES. The subsidiary in Cameroon has signed an agreement with the Comité de lutte contre le SIDA to raise funds and encourage the participation of the private sector in the fight against AIDS.

An AIDS communication program has also been organized in conjunction with a specialized NGO.

The subsidiary has a team of health education instructors who run awareness and information meetings for employees and conduct regular screening programs. Staff take part on a voluntary basis, and all costs are borne by the subsidiary (brochures, training, education, human resources, etc.).

amendments in France covering issues such as remuneration, employee access to the intranet and e-mail, and the life assurance and complementary pension schemes.

Targeted social communication

Staff throughout the Group are kept regularly informed of any developments within Société Générale or HR issues that affect them directly. For example, Société Générale and its subsidiary, Crédit du Nord, have provided detailed information on the impact of the pensions reform (Fillon law of August 2003), and issue updates as new regulations are published. Similarly, the Czech subsidiary, Komercni Banka, has organized an advertising campaign to inform its employees of the new options for the pension fund.

Providing adequate social protection

One of the main priorities of Société Générale's HR policy is the provision of social protection for all Group employees.

(1) 65 countries or 83%. (2) 52 countries or 67%. Staff are provided with adequate health and invalidity cover, which in many countries (1) goes beyond the requirements of local legislation. In most cases (2), the Group's pension systems offer greater long-term advantages for employees than those recommended or imposed locally.

The number of accidents in the workplace fell to 444 for the entire Group. Accident prevention programs have been implemented in most western countries, comprising regular health checks and flu vaccinations.

In the United Kingdom, employee health insurance benefits have been increased for long-term sickness.

In African countries with a high risk of epidemic, the Group's subsidiaries actively participate in vaccination campaigns to contain serious diseases such as meningitis, yellow fever and tuberculosis. In poorer countries such as Benin, Brazil, Cameroon, Chad, Côte d'Ivoire, Ghana, Madagascar, Morocco and Senegal, the Group provides a fixed bonus to employees with children at school in order to foster economic development through improved education.

Providing the resources to deal with high-risk situations

Since 2003, the Group has implemented specific teams and resources to ensure the continuity of its business activity in the event of a major incident (see Business Continuity Plan on page 51). The primary aim of this policy is to improve staff security, notably in high-risk situations. Various measures have been developed and adapted to local conditions. For example, employees can call toll-free telephone numbers to obtain direct information on any exceptional events that affect their activity. During the political and social unrest in Côte d'Ivoire at end-2004, the Group took appropriate measures to protect its expatriate and local employees.

In addition, emergency measures are also in place to deal with specific health risks such as SARS or avian flu.

THE MOROCCAN EXAMPLE

Société Générale Marocaine de Banques has installed a customized internal promotion system, based on the French model, which allows employees to follow a training course and sit exams that will ultimately entitle them to assume managerial responsibilities. On average, 100 employees register for this 2-year course each year.

BREAKDOWN OF MANAGERIAL TRAINING BY SUBJECT 19%

15%

22%

33% 11%

• Communications
• Interpersonal relations
• Personal development
• Team management
• Project management

Bernard Michel

Born 1954 in Casablanca, Morocco Mandorle**, 1994** Plasterboard 120 x 120 cm

Activity 2004

Andy Warhol 1928-1987, United States Flowers**, 1971** Screen-print 90 x 90 cm

Retail Banking

The Group's Retail Banking arm comprises the French Networks (Société Générale and Crédit du Nord group), Retail Banking outside France and Specialized Financial Services.

The leading non-mutual retail banking group in

France —

16.4 million individual customers, up 7.8%

—

ROE after tax: 20.1% —

A major European player in business finance and services —

Key figures ACTIVITY 2004 RETAIL BANKING 74_75

Growth in commercial activity

INDIVIDUAL CUSTOMERS OF THE RETAIL BANKING NETWORKS In millions

NUMBER OF CURRENT ACCOUNTS IN THE FRENCH NETWORKS In millions

NUMBER OF BANK CARDS ISSUED BY THE FRENCH NETWORKS In millions

NUMBER OF SAVINGS ACCOUNTS IN THE FRENCH NETWORKS In millions

In millions of euros

2002 2,106 2003 2,350 2004 2,750 +17%

NET BANKING INCOME OPERATING INCOME In millions of euros

BY BUSINESS LINE

Despite a continuing unfavorable environment for retail banking activities in 2004, the Société Générale Group put in excellent financial and commercial performances. Net banking income for the Retail Banking and Specialized Financial Services arm grew 7.9% to account for 59% of the Group's consolidated revenues. Net income for the division increased by 17.3% while the ROE after tax continued to rise, coming out at 20.1%.

These results reflect the Group's ongoing efforts to expand the customer base and build up loyalty, while at the same time harnessing synergies with the Group's other business lines.

RETAIL BANKING MANAGEMENT COMMITTEE

Didier Alix Chief Executive Officer of Retail

Banking Yves-Claude Abescat Head of Investment Banking

for Mid Caps Yannick Chagnon Head of SG Payment Services

Michel Douzou Deputy Head of Retail Banking Société Générale France

Jean-François Gautier Head of Specialized Financial Services

Maurice Kouby Head of Information Systems, Retail Banking

Claude Labatut Head of Human Resources, Retail Banking

Jean-Louis Mattei Head of International Retail Banking

Emile Noebes Chief Financial Officer for Retail Banking

Christian Poirier Head of Strategy and Marketing, Retail Banking

Jean-François Sammarcelli Head of Retail Banking Société Générale France

* Excluding Crédit du Nord Group.

Société Générale Network

Sustained commercial development

Growth in the franchise

The Société Générale Network continued to expand its business franchise at a sustained pace over 2004, with a 2.3% rise in the number of current accounts to over 5.3 million.

This performance is attributable to the strong commitment on the part of our staff, successes in all our market segments and the quality of the Société Générale platform in high-growth areas.

A targeted approach combined with key partnerships

Over the year, the Network continued to focus on increasing its market share, notably with under-25s who now account for one customer in every four. It launched a number of marketing campaigns aimed at specific age brackets: Bac 2004 for children in secondary school, Prêtà-portable, Coupez le cordon avec Pack jeunes for students, etc.

This targeted policy led to strong growth in the number of Livret Jeunes (young persons passbook accounts) (+8%) for 12-25 yearolds and in Eurokid accounts for the under-12s (+11%).

Mortgage loans are also an excellent tool for attracting new customers, and Société Générale now offers separate Habipack solutions for both residential buyers and investors, comprising a housing loan, a home insurance policy and specific services (remote security surveillance, guarantee against unpaid rent, etc.).

Société Générale's long-term partnership with Banque Fédérale Mutualiste (BFM), set up in 1986, also delivered results in 2004 with 32,000 new BFM/ Société Générale current accounts opened over the year, representing 8% of total account openings for the Société Générale Network.

The partnership is designed to offer civil servants a range of services tailored to their needs, and has attracted a total of 600,000 customers since it was set up.

Constantly adapting our products and services

Société Générale aims to secure the loyalty of its customers by offering a full range of products

Pack Jeunes: a simple and comprehensive banking solution for 18-24 year olds —

In 2004, over 150,000 young people signed up for this package, which combines a bank card, an insurance policy for means of payment, no overdraft charges, a loyalty program, etc.

STRATEGY

• DEVELOP our franchise and the number of products per current account.
• CAPITALIZE on our existing customer base using relationship management tools.
• FINALIZE the rollout of our multi-channel distribution platform.
• HARNESS SYNERGIES with the other Group business lines.

22,450 employees —

2,141 branches —

and services that are perfectly suited to their needs (JAZZ package, Logitel Net, mortgage loans, etc.). The steady rise in the number of products per personal current account, from an average of 6.6 in 2000 to 7.7 in 2004, bears witness to the success of our strategy.

Launched in 1998, the Jazz package had attracted over 1.9 million customers by the end of 2004. Inspired by this success, Société Générale has created JAZZ Duo, offering a similar range of services for joint account holders: a bank card, insurance for means of payment, associated services and a loyalty program.

Customer relationships: clear-cut commitments

In November 2004, French banks undertook to "make banking easier" for their customers.

Over 2005, we should see a number of concrete measures implemented to achieve this objective.

Société Générale had already taken steps to improve transparency, providing clear price guides at its branches and over the Internet, and sending out account agreements to customers specifying the conditions for the day-to-day operation of their deposit accounts and any other products or services they use.

Société Générale was also one of the first banks to appoint an independent ombudsman in 1996.

At the end of 2004, the bank implemented a further series of concrete measures designed to meet three key priorities: to provide customers with adequate tools to assist in decision-making, give everybody access to a current account and simplify the functioning of customer accounts.

Individual customers

Savings: customers are focusing on accessibility and security

In a climate of low interest rates, persistent unemployment and volatile financial markets, individual customers are preferring to keep large volumes of liquid savings, as shown by the sharp increase in current account deposits (+6.9% compared with +2.5% in 2003), and in ordinary passbook savings deposits (+13%).

Outstanding deposits in PEL (housing savings accounts) grew at a slower pace than in 2003 (+1.5%), under the continued impact of fiscal and regulatory reforms. Furthermore, in 2004, customers no longer had the option of opening PEP (popular savings accounts).

Stock market uncertainties

Despite exceptionally low interest rates and the sharp rise in corporate profits, equity markets struggled to repeat their 2003 performance, weighed down by a sliding dollar and soaring oil prices.

Easy access to information on prices —

A price list setting out the terms and conditions for banking transactions is now available at the network branches and via the Internet.

In March 2004, all individual customers were sent a brochure giving them three months' advance notice of changes to the service and product prices indicated in their account agreement.

5.3 million current accounts: +7% in 3 years —

7.7 products per personal current account —

EUR 78 billion of outstanding loans: +7% —

197 million customer contacts via direct banking channels: +20% —

The Epicea PERP achieves top rankings —

Société Générale's PERP (personal retirement savings plan) was voted one of the best products on the market by Les Dossiers de l'Épargne (Label d'Excellence 2005), Mieux Vivre Votre Argent (June 2004) and Le Revenu (June 2004).

However, encouraged by the slight upturn in stock market indexes in 2004, the Government stepped up its privatization plans, and Société Générale actively helped to place shares in Pages Jaunes, Snecma and Société des Autoroutes Paris-Rhin-Rhône.

Strong inflows into capital-guaranteed funds

Given the current climate of uncertainty, customers are tending to favor capital-guaranteed funds. Following on from the success of Sogélyre, Société Générale launched Sogélyre Cliquet, a product that guarantees the initial investment, and offers additional returns linked to the performance of a basket of funds. These two products attracted total inflows of EUR 990 million. All other types of mutual funds, in particular those most exposed to risk, saw a decline in inflows, with the exception of the Déclic Bourse fixed contribution savings range (+15%).

A dynamic performance from life insurance and retirement savings

The PERP (personal retirement savings plan) was set up under the Fillon law in 2004 to encourage individuals to build up savings for retirement by offering major tax incentives.

Société Générale launched its own version of the PERP, Epicea, a fixed or adjustable contribution retirement scheme that allows individual or professional customers to build up an additional retirement annuity and also offers immediate tax benefits. The product has proved a great success, attracting over 71,000 customers by the end of 2004.

This concern with retirement savings also gave an added boost to life insurance products which are already France's most popular savings product, as they offer advantages such as flexibility, tax incentives, wealth planning, etc. Sales of policies rose 21% in 2004, outstripping the market.

The current preference for security also led the Group to shift its product range towards eurodenominated and capital-guaranteed vehicles.

THREE NEW ADVERTISING CAMPAIGNS IN 2004

Three advertising campaigns were launched in 2004 focusing on the theme of "the bank that makes life easier": ■ two films on free account consultation services via Internet

for individual customers;

■ a film by Gérard Jugnot for 18-25 year-olds;

■ a series of comedy vignettes by Antoine de Caunes advertising the fact that customers can contact an adviser up to 10 pm.

Loans: exceptional growth in mortgages

The mortgage loan market remained buoyant throughout 2004, thanks notably to attractive financing conditions. After six years of sharp growth, loan issuance in France reached another all-time high in 2004.

The Société Générale Network granted over EUR 11 billion of new loans over the year, up 15% on 2003. The proportion of floating rate loans increased to 27%, thanks to the success of the Prêts Immobiliers Double Sécurité, which offer capped variable rates.

In consumer credit, the French Government decided to introduce a tax credit on consumer loans to boost private spending. Société Générale took the initiative of extending this tax credit from 2 to 3 years. Outstanding Expresso installment loans increased by 5% over the year. At the same time, outstanding revolving loans registered 10% growth.

Professional customers (1)

Faced with an increasingly competitive market, Société Générale stepped up its commercial drive, taking advantage of its efficient organizational structure and tailor-made offering for professionals.

Four years after its launch, the Signature Pro package, designed to simplify day-to-day account management, is now held by over 50% of customers. The new electronic payment solution, Progécarte, launched at the end of 2003, has attracted more than 56,000 customers. The Network also asserted its position as the French market leader in Visa Business cards with over 170,000 cardholders.

One of the main areas where Société Générale seeks to differentiate itself from the competition is in customer satisfaction. According to its customer satisfaction barometer, introduced in 2002, the Bank's efforts in this area have paid off, with sharp rises in its satisfaction, confidence and image indicators.

(1) Self-employed professionals, tradespersons, shopkeepers and farmers.

Awarded the Label d'Excellence for its PERCO product, Arcancia Pro —

The magazine Dossiers de l'Épargne awarded Société Générale's Arcancia Pro range of plans the Label d'Excellence for 2005: these collective retirement savings achieved top rankings among the products examined (between September 2003 and 2004).

GROWTH IN NUMBER OF PRODUCTS PER PERSONAL CURRENT ACCOUNT

Services Loans

GROWTH IN OUTSTANDING LOANS TO INDIVIDUALS CHANGE IN OUTSTANDING ON-BALANCE SHEET

DEPOSITS, EXCLUDING SHORT-TERM NOTES (RESIDENTS)

SOCIÉTÉ GÉNÉRALE GROUP - 2004 ANNUAL REPORT

Business customers

2004 saw an improvement in corporate earnings, thanks primarily to the focus on productivity gains over recent years. The SME segment, Société Générale's strategic growth target, remained robust, with a 7.1% rise in outstanding investment loans, and a 2% rise in operating loans.

Despite the sharp drop in term deposits due to low interest rates, business customer on-balance sheet deposits remained buoyant (strong rise in sight deposits).

Société Générale introduced Sogecash Net in 2004 to allow business customers to improve the online management of business customer accounts, and also created Sogetrade Net, a transactional website for the management of import documentary credits. New additions to the service range are also planned for 2005.

In 2004, Société Générale introduced the Arcancia PERCO, a collective retirement savings plan where employers supplement staff contributions, and employees can choose from a lump sum or an annuity when they retire.

This new product complements

Société Générale's existing range of retirement savings products for business customers (Palissandre Entreprises).

Finally, the end-of-career bonus fund, Andante Multisupports, attracted growing numbers of customers, thanks to its broad management approach that offers both security and performance.

A leading online trading service

—

Passeport Bourse**, Société Générale's online trading site, now covers the New York, London and Frankfurt stock exchanges.**

In 2004 it was awarded the Label d'Excellence by Les Dossiers de l'Epargne for the second year running, in recognition of its competitive prices and excellent quality of service.

AWARDS FOR CUSTOMER RELATIONSHIPS

Société Générale was once again singled out for an award at the Podium de la relation client which focused on "policies to enhance customer loyalty through services". The Bank ranked third in all sectors with a satisfaction rating of 80% (1). Compa- nies were evaluated by over 3,000 Internet users on the basis of their integrated service offering, notably Internet and mobile phones.

(1) Source: TNS Sofres/BearingPoint, December 2004.

Multi-channel banking: finalization of the new distribution platform

In 2004, Société Générale continued its overhaul of the distribution network, designed to realign its sales, direct banking and aftersales service functions.

By the end of the year, more than two thirds of the network had been reorganized, with 54 sales divisions (DEC) in charge of customer relationships, 4 multimedia customer relations centers (mCRC) to support the network branches and 18 customer service units (PSC) handling all aftersales services.

Under the new organizational structure, the departments are all connected to a central customer relationship management application, Contact, to ensure closer cooperation and increase commercial efficiency, service quality and customer satisfaction.

With these major investments, Société Générale is clearly making multi-channel banking a strategic focus for its Retail Banking arm.

At the same time, it is reviewing its sales techniques to better identify customer needs, exploit commercial opportunities and ensure closer cooperation between the different departments.

Direct banking: over one million customers now use Logitel Net

Direct banking continued to attract new customers in 2004, and is now the channel of choice for certain transactions: two thirds of stock market transactions and nearly half of all one-off transfers by individual customers are now carried out via direct channels.

The three most popular direct banking channels are:

• Internet, where Société Générale has developed specific sites for each market segment: individuals (free access, over 1 million regular users in 2004 and a 45% rise in frequency of use compared with 2003), professionals (over 50,000 users of Progéliance Net or 350,000 connections per month), businesses (212,000 connections per month);

• Mobile Internet (Wap and I-mode™) with over 1 million connections over the year, representing nearly a twofold increase on 2003;

• SMS, with the Messalia message alert system. Subscribers totaled 640,000 in 2004, up +11% year-on-year.

Société Générale also sells a selection of products and services online, allowing customers to subscribe from the comfort of their own home. The individual customer website now offers some 30 products and services.

A new website dedicated to the youth market

—

Société Générale has developed a specific site for 16-25 year olds, www.jeunes.societegenerale.fr. This interactive site, dedicated entirely to banking, is designed to increase young people's understanding of the world of finance.

Crédit du Nord Group Network

An offering adapted to customer needs

In 2004, the Crédit du Nord Group took a number of steps to extend its existing product and service range:

• Development of the online "Securities and Stock Market"

CRÉDIT DU NORD MANAGEMENT BOARD

Alain Py Chairman and Chief Executive Officer Bernard Beaufils

Chief Executive Officer Marc Batave Deputy Chief Executive Officer & Group Chief Client Officer

Jean-Pierre Bon Deputy Chief Executive Officer & Group Chief Financial Officer

Patrick Renouvin Deputy Chief Executive Officer & Group Chief Information Systems Officer

Pierre Boncourt Group Chief Human Resources Officer

Francis Molino

Group Chief Banking Operations Officer Clare Brennen

Group Chief Communications Officer (attends Executive Committee meetings)

offering in partnership with Boursorama. This new financial information website has been integrated into the Group's existing web structure, and enables customers to follow their favorite stocks online, manage their portfolio in real time, place market orders and view research on their chosen stock.

• Extension of the life insurance offering, with the launch in November 2004 of Antarius Horizon Premium, a top-of-the-range, multi-vehicle policy managed by Antarius (a life insurance subsidiary half owned by Crédit du Nord and half by Aviva).

• Launch of two new capital guaranteed products: Etoile Garanti April 2010 and Etoile Garanti December 2010, which offer a guarantee on both the initial investment and the fund performance.

• Creation of decision-making tools: simulators for employee savings (PEI, PERCO), loans, savings (PEL, retirement, etc.).

A business model that has earned strong recognition

From customers:

In 2004, the Crédit du Nord Group achieved the following rankings in the CFI (1) competitive surveys of the banking industry: • No. 1 bank for customer satisfaction in the business customer segment (satisfaction rate: 71%). • No. 1 for customer satisfaction in the self-employed professional segment (satisfaction rate: 65%). • No. 2 for customer satisfaction in the individual customer segment (satisfaction rate: 74%).

From external bodies:

■ Recognition of the quality of the Group's employee savings offering:

In 2004, Crédit du Nord came second in the Corbeilles de l'épargne salariale (employee savings awards) organized by the magazine Mieux Vivre Votre Argent. This underlines the high quality of investment manage-

(1) Independent research body.

Gilbert Dupont

—

Gilbert Dupont, a subsidiary of the Crédit du Nord Group, is a stock broker specializing in the mid-cap market. It works with French and European institutional investors in a sales and advisory capacity, and provides a full range of issuer services. The company also routes stock market orders for financial institutions.

In 2004, Gilbert Dupont achieved the following rankings:

• No. 4 in the "Top 5" French research bureaux, compiled by the American company Starmine, which specializes in the rating of analysts;

• No. 2 for the quality of its recommendations for Midcac stocks, according to AQ Publications**;**

• No. 3 for the quality of its recommendations for Paris-listed stocks, again according to AQ Publications.

STRATEGY

The banks in the Crédit du Nord Group (Banques Courtois, Kolb, Laydernier, Nuger, Rhône-Alpes, Tarneaud and Crédit du Nord) have based their development on the following principles: ■ STRONG CUSTOMER RELATIONSHIPS: all customers have a dedicated customer adviser at their branch, who they can contact directly by e-mail and by telephone. They also have access to the Group's top experts in their particular region.

■ ACTIVE DIALOGUE: for the past 10 years, the Group has conducted annual satisfaction surveys of customers and prospects to give it an overall vision of their reactions and help it to identify areas for monitoring or improvement. The level of satisfaction expressed by the Group's customers reflects their strong support for its banking model.

ment for the employee savings contracts, Etoile Sélection and Etoile PEI.

■ Recognition of the standard of service provided by its call center:

Customers of the Crédit du Nord Group have access to a full range of Internet, minitel and telephone banking services. For the fourth year running, the Group's call center won the Casque d'Or for the "best B-to-C relationship" at the 2004 European call center exhibition and the Casque d'Or for the "best French call center", awarded by ECCCO (European Confederation of Contact Center Organizations).

■ Acknowledgement of the quality of its financial products:

Throughout 2004, the Group's mutual funds were repeatedly commended for their performance by both the Morning Star and Standard & Poor's. A total of 19 funds managed by Etoile Gestion were regularly awarded 4 or 5 stars out of a maximum of 5.

An effective business model

■ The number of individual customers continued to rise, reaching a total of 1,250,840 at the end of the year. 67.7% have 3 products or more, and the uptake for top of the range products is increasing steadily: 5.8% of these customers have a Norplus premier account agreement.

In total, 94.2% (1) of new Crédit du Nord Group customers say they are happy with their bank.

■ The number of self-employed professionals rose by 5.2% over the year, reaching a total of 129,700. 48.8% of these use Crédit du Nord for both their personal and professional banking requirements.

■ The number of business customers increased by 2.3% in 2004. The Group now has 26,000 business customers and 3,000 institutional clients.

A dynamic business model

In the second half of 2002, the Group initiated its "Optimum" program, a complete review of its operating procedures, to be conducted in parallel with the modernization of its IT network.

Over 200 staff took part in a variety of working groups, culminating in the implementation of some forty modernization projects at the end of 2003.

The most important assignments, which have been grouped into a "branch project", were launched in 2004 and are designed to meet three main objectives:

• to reduce the amount of time staff spend on administrative tasks so they can concentrate on customer relations;

• to maximize the skills and competencies of branch staff;

• to generate productivity gains. Under these targeted projects, the Group has already expanded the sales teams at its new branches and scaled back its internal administrative procedures. The projects are expected to be completed in the first half of 2005, and should boost the Group's profitability and growth for the coming years.

(1) Source: Survey of new customers carried out by Crédit du Nord in the second half of 2003.

Signature of a partnership agreement with Boursorama —

Since May 2004, the Crédit du Nord Group has offered its customers an innovative financial information service via the Internet, designed in conjunction with Boursorama. This is the first partnership of its kind between a banking group and the leading French Internet provider of stock market information.

1.4 million customers: +2%

647 branches

—

—

926,600 individual customer current accounts: +1.8% —

8,400 employees —

EUR 14.2 billion of outstanding deposits: +6.1% —

EUR 16.8 billion of outstanding loans: +9.1% —

Retail Banking outside France

A successful strategy

* Subsidiary currently being sold.

RETAIL BANKING OUTSIDE FRANCE Since its creation in 1998, the Retail Banking outside France division has pursued a growth strategy based on the exportation of its domestic retail banking expertise to other high potential countries.

The division is gradually rolling out Société Générale's universal banking model through a combination of organic growth and acquisitions, bringing its products and services to a broad range of individual and business customers, and expanding the global footprint of the Group's retail network.

High profitability

The division is using strict selection criteria to target markets offering excellent prospects for growth and profitability with an acceptable level of risk.

In line with this policy, Société Générale acquired General Bank of Greece in early 2004, the 7th largest bank in the country with a total of 300,000 customers.

STRATEGY

• ORGANIC GROWTH of the foreign retail banking subsidiaries, taking account of local specificities.
• Controlled ACQUISITIONS that offer sound risk diversification.
• TRANSFER of best practices in domestic retail banking to subsidiaries outside mainland France.
• DEVELOPMENT of intra-group synergies.
• CONSOLIDATION of acquisitions.

At the same time it is continuing to focus on organic growth, and has set itself ambitious development targets:

• number of individual customers: +458,000 (1);

• outstanding loans: EUR +2.1 billion (2);

• outstanding deposits: EUR +2.2 billion (2);

• number of branches: +77 (1) Business levels remained robust over 2004, with revenues rising to nearly EUR 2 billion, a 16% gain on 2003, and a return on allocated capital (ROE after tax) of 33%.

A commercial strategy based on a solid business model

The Group is aiming to expand its presence in the international retail banking market by adapting its domestic model to local markets outside France.

This strategy is based on three main objectives:

• Development of a global presence in both the individual and

(1) When adjusted for changes in Group structure.

(2) When adjusted for changes in Group structure and at constant exchange rates. business customer markets and exploitation of the complementarities between the two segments.

• Harnessing of synergies with the Group's other business lines in order to extend its range of products and services. To achieve this, Société Générale is encouraging closer cooperation between its businesses, such as Corporate Banking, Wealth Management, Specialized Financial Services, Investment Management, etc. and, where possible, setting up specialized subsidiaries outside France, such as the consumer credit activity recently launched in Russia.

• Positioning of the division as a local bank, in touch with its customers' needs, through the opening of branches in highgrowth areas, the use of stateof-the-art tools such as multichannel banking and the evaluation of service quality via satisfaction surveys. The Group is also allocating customer advisers to specific portfolio segments, expanding its sales force at the branches and providing targeted training courses for its staff.

Thanks to this strategy, the international retail banking arm has seen a steady rise in its customer

Launch of a new branch concept at BRD

—

On October 8, 2004, BRD opened a total of 33 new BRD Express branches in Romania. This was an unprecedented move both on a national and international level, and highlights BRD's aspiration to become one of the leading local banks in its domestic retail market. The new BRD Express branches are dedicated solely to private clients and are part of an ambitious growth strategy involving the creation of 100 outlets by the end of 2005, to increase BRD's presence in Romania's main cities and public areas (chamber of deputies, ministries, universities and shopping centers). At end-2004, BRD had 212 outlets, including 41 BRD Express branches.

MAIN INDICATORS FOR RETAIL BANKING OUTSIDE FRANCE

	2004	1998
Number of branches	1,545	300
Employees	29,500	6,700
Number of individual customers	5,400,000	700,000
Number of business customers	564,000	100,000

6 million customers and 31 subsidiaries —

EUR 27 billion in customer deposits —

29,500 employees —

1,545 branches —

base (+4.4 million in 5 years).

disposal.

strategy

Standardization of organization and procedures

Work is continuing to harmonize banking practices and IT systems at the international subsidiaries. One of the main priorities is the standardization of risk management procedures, in particular the decision-making process for granting lines of credit and the risk monitoring tools used throughout the Group.

A strategy of targeted geographical expansion

The Retail Banking outside France division is focusing its development on three major geographical regions: Central and Eastern Europe, the Mediterranean Basin and Africa.

In line with this policy, the Group is currently in the process of selling its Argentine subsidiary and should complete the transaction in 2005. As Banco Société Générale had successfully managed to weather the economic crisis in the country, the Group has been able to negotiate favorable terms for the

Central and Eastern Europe: the keystone of our growth

Since 1999, Société Générale has concentrated on growing its franchise in Central and Eastern Europe and has become a major player in the region. It now has nine subsidiaries in the European Union and accession countries (Romania and Bulgaria), which account for 63% of the division's customers and 56% of its outstanding loans.

The Group is currently in the process of integrating General Bank of Greece (GBG), which it acquired in 2004, and is focusing in particular on the following areas:

• renovation and expansion of the branch network: the Group began bringing the existing GBG network in line with its own standards at the start of 2004, with the opening of two new branches in Athens;

• modernization of IT systems and enhancement of processes to ensure greater quality of service and operating efficiency.

In the Czech Republic, the integration of Komercni Banka, which was acquired at the end of 2001, is now complete. The Group has overhauled the subsidiary's existing structure, boosted sales, set up partnerships with other business lines and applied Société Générale's internal management principles. It has successfully followed through its development strategy and is now in a position to capitalize on the existing customer base, which had risen to 1.1 million individuals at end-2004 (+180,000 since the acquisition).

Société Générale acquired BRD, or Banque Roumaine pour le Développement, in 1999 and recently increased its stake to 58%. The subsidiary is a prime example of the success of Société Générale's development model – it has delivered strong performances and is now the second largest bank in the country, with 1.4 million customers (+9% year-on-year), a 17.6% mar-

Komercni Banka named "Bank of the Year" for 2004 —

Komercni Banka (Czech Republic) was voted "Bank of the Year" in the 2004 MasterCard Bank of the Year awards for the quality of its financial services for individual customers. It also won top prizes in four other categories. With a network comprising 338 branches and nearly 1.4 million customers, Komercni Banka is the third largest bank in the Czech Republic in terms of assets and the second largest on the Prague stock exchange in terms of market capitalization. The company is one of the main pillars of Société Générale's platform in Central and Eastern Europe where it has become a leading player in retail banking.

ket share in loans and a 16.1% market share in deposits. Its network of 212 branches is growing strongly, and the company has launched an ambitious program of new branch openings.

Since its acquisition in 1999, the Bulgarian subsidiary, SG Expressbank, has almost doubled its customer base (257,000 at end-2004) and posted excellent performance ratios. The company is currently being reorganized and expanded, with new branch openings scheduled for 2005, bringing the total to 110 by the end of the year (including 18 in Sophia). At the same time, work is also underway to extend the range of products and services on offer.

In Serbia-Montenegro, Société Générale Yugoslav Bank has built up a network of 26 branches since its acquisition in 2001, and now has over 100,000 individual customers.

In 2003, Société Générale decided to develop a retail banking business in Russia, the leading market in Central and Eastern Europe (population of

144 million and estimated GDP of USD 569 billion in 2004). The Group plans to open 23 new branches by the end of 2005 offering a standard range of retail banking products and services and a complete multi-channel platform.

A growing presence in the Mediterranean Basin

The Société Générale Group is continuing to expand and consolidated its market share in the Mediterranean Basin, despite the tough competitive environment.

With 180,000 customers and a network of 39 branches, National Société Générale Bank (NSGB) now ranks second in the Egyptian private banking market. It is pursuing a policy of organic growth, with the following priorities:

• development of a comprehensive range of products and services for all customer segments, through close collaboration with the Group's business lines;

• creation of an extensive direct banking platform, comprising ATMs (+35 scheduled for 2005), Internet banking, telephone banking, a call center;

• harnessing of synergies between

the private client and business customer segments;

• expansion of the branch network: 18 new branch openings scheduled for 2005.

Société Générale Marocaine de Banques (SGMB) is Morocco's fourth largest bank, with a network of 200 branches. The subsidiary has taken advantage of potential synergies with the Group's other business lines, to offer a wide range of products to its 334,000 customers.

The Group has recently extended its presence in Algeria through its subsidiary, Société Générale Algérie (SGA), with an expansion of the network (8 branches at end-2004) and a rapid increase in the number of customers.

The Tunisian subsidiary, Union Internationale de Banques (UIB), was acquired at the end of 2002, and is currently being integrated into the Group structure. The process involves the harmonization of IT systems, extension of the product offering, consolidation of the customer base and cleaning up of the portfolio.

A long-standing, profitable presence in Africa

Despite a sometimes difficult political and economic context, the Société Générale Group remains the leading player in West Africa. It has a long-standing presence in 10 countries in the region, frequently spanning several decades, and generates high levels of profitability. The Group offers a range of innovative products and services to the local market, but also makes an active contribution to the development of the local economy by financing micro-credits, an essential tool in the fight against poverty. Société Générale has maintained its presence in Côte d'Ivoire, despite the political instabilities, but has been scaling back its sales teams over the past twelve months, to bring them more in line with the level of economic activity in the country.

SOGÉCAP IN EGYPT

As part of the Group's growth strategy in Egypt, Sogécap set up a new life insurance business in 2003 in conjunction with the Group's Egyptian subsidiary, NSGB. Combining Sogécap's insurance expertise and NSGB's distribution capacity and 180,000 strong customer base, the new subsidiary, NSGB Life Insurance, has successfully launched a range of savings and providence

plans specifically designed to meet the needs of an Egyptian clientele (e.g. savings funds to build up capital for a child's marriage). After just twelve months, the company is one of the strongest players in the market, with a 4% share of insurance policy sales, and its products are helping to secure the loyalty of existing NSGB customers.

Specialized Financial Services

Five areas of expertise serving an international customer base

SPECIALIZED FINANCIAL SERVICES AND INSURANCE: THE STRENGTH OF AN INTERNATIONAL LEADER

• A platform spanning 30 countries:
• Consumer credit: 8 countries
• Insurance: 7 countries
• Operational vehicle leasing and fleet management: 24 countries
• Vendor and equipment finance: 18 countries
• IT asset leasing and management: 10 countries

Société Générale's Specialized Financial Services division offers a comprehensive range of financing solutions and services to individual and business customers in France and abroad.

The Group's business finance services cover operational vehicle leasing and fleet management and IT asset leasing and management. For individual customers, it offers a broad selection of consumer loans and insurance policies.

In 2004, financial services and means of payment activities posted net earnings of EUR 385 million, up 35% on 2003, confirming their ability to deliver profitable growth.

Business finance and services

IT asset leasing and management: a dynamic European leader

ECS Group provides innovative, tailor-made financing solutions to over 7,000 customers across Europe. It has 45 branches in 10 countries, serving major clients in

STRATEGY

• MOBILIZATION of staff behind a project of sustainable and profitable international growth.
• GROWTH in consumer credit throughout the world.
• EXTENSION of our other business lines outside Europe.
• DEVELOPMENT of partnerships and pooling of knowledge and skills with other business lines.

France and abroad, such as EDF, Nestlé, Olivetti, Ikea, 3M, etc. As part of its European expansion strategy, ECS acquired Parsys Group's Spanish subsidiary and developed a new range of infrastructure financing services. In 2004, it posted robust growth in new lending (+6%) and services (+18.9%), reasserting its leadership position in Europe with turnover of EUR 1.7 billion.

Vendor and equipment finance: a new international brand

In September 2004, Société Générale launched SG Equipment Finance, a unique brand that groups together its vendor and equipment financing activities. The move is part of Société Générale's commitment to developing its activity outside France and meeting the needs of major manufacturers and distributors of capital goods. SG Equipment Finance also offers its services through the retail banking distribution network, notably in Italy and Germany.

In Scandinavia, Société Générale has strengthened its positions in Norway, Sweden and Denmark by acquiring the business finance activities of Elcon (Norway's leading player in this field) from the Santander group.

SG Equipment Finance has also continued to build up its commercial relationships in Europe, signing a cooperation agreement with the Italian subsidiary of the German group, Linde, and completing a major equipment finance transaction with Zurich Assurance.

With a presence in 18 countries, the company achieved growth of 14.7% in its outstanding loans in 2004, reaching a total of EUR 15.4 billion (*).

Operational vehicle leasing and fleet management: the ongoing development of a major player

Thanks to a combination of acquisitions and organic growth these past years, ALD Automotive now ranks No. 2 in the European operational vehicle leasing market. In 2004, it expanded its fleet under management by 9.5% to a total of 558,000 vehicles and increased its outstanding financing by 11.4% to EUR 6.3 billion (*). ALD Automotive achieved a number of commercial successes over the year, primarily as a result of pan-European partnerships with major clients (Honeywell, Merck A.G., etc.). It also provides Ford and Opel with a turnkey service that they sell through their own network under their respective brand names.

The company continued its international expansion over the year, launching new operational subsidiaries in Slovenia, Russia, Switzerland, Ukraine and Estonia.

(*) Outstanding loans at end-December 2004.

ALD Automotive: international online reporting

—

In order to keep pace with the needs of its customers, ALD Automotive has implemented an international reporting system to monitor its vehicle fleet via Internet. This online service allows ALD Automotive to check day-to-day developments in its vehicle fleet in all countries where it operates.

5.8 million (1) customers —

30 countries (1)

— 9,870 (1) employees —

EUR 38.5 billion (1) of outstanding loans*

—

(1) Excluding international and domestic payments. *Outstanding loans at end-December 2004.

SOCIÉTÉ GÉNÉRALE GROUP - 2004 ANNUAL REPORT

Individual customer finance: development of consumer credit

After reinforcing its positions in its traditional consumer credit markets in France and Italy, the Specialized Financial Services division stepped up its drive to penetrate international markets using the expertise and tools of its specialized loan companies.

In France, Franfinance and CGI posted sustained growth, with outstanding loans rising 6.7% to a total of EUR 9.7 billion (1).

In Italy, Fiditalia signed a number of commercial agreements with major financial networks (Banca Reala, Assurances Aurora) and local retail distributors (Poltrone e Sofa). It also launched "Tandem", an innovative loan for families that want to help their children financially. Once the children are financially independent, they can assume the debt under favorable financial terms. Outstanding

(1) Outstanding loans at end-December 2004.

loans at Fiditalia rose 12.4% in 2004 to EUR 2.1 billion.

New operations outside France

In June 2004, Rusfinance, a specialized credit company, successfully launched its business in Russia. After just six months of activity, it has already attracted more than 26,000 customers.

In Germany, Société Générale recently acquired 75% of Hanseatic Bank, the No.4 consumer credit company in the country, from its parent company, Otto (the leading international mail order company). Under the terms of the agreement, Société Générale and Otto will maintain an exclusive 30-year partnership for the financing of Otto and Schwab's (Otto group) mail order sales.

Société Générale also set up a subsidiary in Tunisia at the end of the year, harnessing synergies between its Specialized Financial Services and international retail banking arms and the Hachicha group (major player in the Tunisian retail market).

A specialized direct distribution service —

In response to changes in the lifestyles of households, Rusfinance (Russia) and Essox (Czech Republic), now distribute their consumer credit offering via direct channels.

Insurance

Sogécap: recognition of quality

Sogécap made a strong entry into the retirement savings market with its leading product, Epicea, singled out by the press as one of the best PERP (personal retirement savings plan) in the market. It now ranks in the top three products in France in terms of inflows (EUR 50 million in investments) and fourth in terms of policy sales (71,000 since May 2004). Sogécap continued its innovation drive with the launch of the CertiPEA health insurance policy and the SG Gestion Privée Vie multi-management life insurance policy for the private banking business in France. In October, the Group's subsidiary, Oradea Vie, completed the product range with Lignage, a new life insurance policy distributed by third-party vendors (insurance brokers or wealth management advisers). Created under the new PERP system, Lignage is a more flexible product that can be adapted to suit the savings requirements of the customer. Sogécap's premium income rose 16.6% over the year to EUR 6.6 billion, which is higher than the growth rate for the French life insurance market (+13%). At the same time, its mathematical reserves increased by 13.1% to EUR 42.2 billion at end-2004. These record results confirm Sogécap's position as the No. 3 banking and insurance company in France.

Sogessur: a record year

The subsidiary put in another strong sales performance in 2004, exceeding 430,000 customers and 530,000 policies. Premium income amounted to EUR 93 million in 2004, up 22% on 2003.

The company recently received ISO 9001 certification for its entire range of property and casualty insurance policies, confirming Sogessur's ongoing commitment to quality.

Over the year, Sogessur expanded its product offering, adding a no excess policy to its range of Home Insurance products, and thus making its "New for Old" policy one of the best in the market.

Innovative insurance

For the third consecutive year, Sogécap swept the floor at the Insurance Oscars with a total of 5 awards.

—

Sogessur, Société Générale's property and casualty insurance subsidiary, was singled out for the Tribulis - Innovation Marketing prize at the Valeurs du Marketing en Assurance (1) awards.

(1) Sponsored by Le Nouvel Economiste, l'Argus de l'Assurance and Marketing Direct.

GERMANY: THE GROUP IS STRENGTHENING ITS POSITION IN CONSUMER CREDIT

With a population of over 82 million, Germany offers strong growth potential for the consumer credit business, and in particular for vehicle loans.

The Group was already present in the country through the specialized company BDK, and in November 2004 it reinforced its platform with the acquisition of Hanseatic Bank (outstanding loans of EUR 1.1 billion (*) and a network of 30 branches across Germany), making it the 4th largest player in the German market.

(*) Outstanding loan at end-December 2004.

SOCIÉTÉ GÉNÉRALE GROUP - 2004 ANNUAL REPORT

Antoni Tapies Born 1923 in Barcelona, Spain Grand T, 1982 Lithography 54 x 43 cm

Global Investment Management and Services

Global Investment Management and Services (GIMS) incorporates all the Group's securities activities for individual, corporate and institutional investors.

• SG Asset Management.
• SG Private Banking.
• SG Global Securities Services for Investors (SG GSSI): securities services.
• Boursorama: online savings.

Global Investment Management and Services enjoyed strong growth in 2004 despite an unstable economic environment and persistently sluggish markets. With gross operating income up 34.5% and a 35.2% increase in net income, this business now accounts for 13% of the Société Générale Group's consolidated net income. Developing the Global Investment Management and Services division is one of the Group's priorities.

The two main strategic objectives are:

■ To consolidate the Group's positions in each of its activities by pursuing an active growth policy at a commercial level (reinforcing cross-selling by developing distribution partnerships, primarily in Asia) and at an industrial level by seizing opportunities for targeted acquisitions.

■ To enhance profitability by developing value-added products and services, controlling costs, and generating productivity gains, in particular via its information systems.

GIMS EXECUTIVE COMMITTEE

Philippe Collas Chief Executive Officer, SG Global Investment Management and Services

Alain Closier Global Head of Securities Services for Investors

Alain Clot Chief Executive Officer, SG Asset Management

Pierre Mathé Global Head of Private Banking

Vincent Taupin Chairman and Chief Executive Officer, Boursorama

Catherine Théry Chief Operating Officer, Global Securities Services for Investors

Bruno Hargous

Head of Administration for the Chief Executive Officer

Laurent Hervé Chief Financial Officer

Fabrice Lamy Head of Risk Management and Audit Department

Brigitte Louis Head of Information Technology

Christian Méli Head of Human Resources

Jean-Marc Vallas Head of Communication

EUR 315 billion in assets under management —

EUR 1,115 billion in assets under custody —

600 million contracts traded by FIMAT on the derivatives market 7,800 staff worldwide —

SOCIÉTÉ GÉNÉRALE GROUP - 2004 ANNUAL REPORT

SG Asset Management

Active investing

BREAKDOWN OF ASSETS UNDER MANAGEMENT: A TRULY GLOBAL PLAYER

The strengths of a global, multi-center player

SG Asset Management's assets under management grew by close to 12% to EUR 267 billion in 2004, on the back of record new money inflows totaling EUR 20 billion, equal to 8% of total assets under management at the beginning of the year.

SG Asset Management capitalized on the market environment, which was generally more favorable than in 2003, by drawing on the strengths it has built up over the years. It has one of the most comprehensive ranges of products and services in the market, recognized expertise in value-added products and an emphasis on quality and risk control and excellent performances in the main asset classes. SG Asset Management is developing its multi-center structure to expand its third-party asset management business. It has four specialized centers in the world's main investment regions (Continental Europe, United Kingdom, United States, Asia), which provide expertise in all asset classes

STRATEGY

• CONSOLIDATE SG Asset Management's position as a global player by ensuring high-quality asset management in all its centers of expertise located in the world's main investment regions (United States, Continental Europe, United Kingdom, Asia).
• OFFER high-return products in all asset classes to all clients worldwide (institutional and corporate clients, distributors, individual investors).
• REINFORCE SG Asset Management's presence in strong growth markets (essentially Asia and Eastern Europe), by developing growth drivers for the years to come.

(equities, bonds, money market, alternative investments) and in all the major world markets.

Some 20 economists and strategists located in the Group's management centers permanently analyze the main global economic and financial movements and anticipate market trends. Nearly 500 fund managers and analysts cover 99% of the world's total market capitalization. SG Asset Management offers over 200 different investment strategies, with independent fund managers who follow a consistent investment approach in a controlled environment where risks are tightly managed and closely monitored.

SG Asset Management has been rated AM2+ by Fitch Ratings since 2000, the best rating awarded to an asset management company for its global operations. For investors, this rating is a measure of the professionalism of SG Asset Management's teams and the excellent level of risk control. SG Asset Management was voted best Asset Manager by French institutional investors for the second successive year in a survey by Amadéis. As such, it is able to provide a tailored response to the expectations of all its investors, helping them achieve a positive "alpha" (outperformance versus a benchmark) or an absolute return.

In-depth local presence to increase distribution partnerships

Having acquired considerable management expertise in all asset classes and all the main markets, SG Asset Management's main priority now is to boost sales and extend its distribution capabilities.

Developing cross-selling is a priority

Cross-selling amounted to EUR 6.7 billion in 2004, up 91% on 2003. It enables our clients in all regions to access all of SG Asset Management's European, US and Asian management capabilities. The sales and marketing teams are active in 20 countries, promoting all the management strategies among their

A major European player in alternative investments —

Since 1991, SG Asset Management has been developing a center of expertise in investment techniques that provide returns which are decorrelated from traditional financial markets. The alternative investment arm now includes 300 specialists and offers innovative solutions aimed at enhancing the performance of an investment or limiting its global risk exposure.

SG Asset Management is among the global leaders in this field, with EUR 34 billion of assets under management at end-December 2004, managed via three platforms: SG AM Alternative Investments, and Barep Asset Management in Paris and TCW in the United States for certain specialized strategies. These platforms are responsible for developing management solutions aimed at generating returns with low volatility and the use of limited leverage.

Four product ranges effectively cover all investor requirements: structured products, hedge funds, private equity and real-estate investment.

The proportion of SG Asset Management's assets under management invested in alternative products has risen from 6% to 13% in four years. Experienced, highly-specialized teams, dedicated IT tools and rigorous risk management provided by an independent team, have all contributed to the increase. This original and highly successful combination of two areas of expertise (asset management and market knowledge) and two strategies (innovation and risk control) allows SG Asset Management to offer its clients a comprehensive, consistent, high-performance range of alternative investment solutions.

EUR 267 billion in assets under management —

EUR 20 billion of net new money —

Rated AM2+ by Fitch Ratings for its worldwide organization —

4th largest euro-zone bankowned asset manager —

SG Asset Management

existing and prospective clients. They are in direct contact with institutional and corporate clients, and 26 people in the marketing department are responsible for responding to requests for proposals, which is increasingly the most common method for selecting fund managers. They maintain a special relationship with distribution networks (which focus mainly on retail investors), including brokers, distribution platforms, insurers, banks, financial companies or independent advisers. Sales of SGAM products made via distribution networks outside the Société Générale Group rose sharply in 2004 and totaled more than EUR 6 billion.

Asia was the second priority growth area in 2004

SG Asset Management has extended its presence in Asia, which offers huge growth potential in terms of its demography and economic growth prospects. ■ SG Asset Management has been present in Singapore since 1996, in Japan since 1998 and in China since 2003 through a joint venture, SGAM Fortune FM, which has attracted more than USD 1 billion since its first fund was launched in July 2003.

■ In 2004, SG Asset Management entered into a partnership with Resona, Japan's fifth largest bank, under which SG Asset Management acquired the asset management company Resona AM. This company's activities have been merged with those of SG Asset Management's subsidiary, SG Yamaïchi AM, under the name SGAM Japan. The first product created for distribution through the Resona networks (providing access to 14 million retail accounts) was launched in September 2004.

■ In South Korea, the agreement signed in April 2004 with IBK, Industrial Bank of Korea, the country's 4th largest bank, led to the creation of a 50/50 joint venture, which received the approval of the South Korean authorities in December. The joint venture gives SG Asset Management a foothold in Asia's fourth largest asset management market.

■ In India, where the mutual fund market has grown by an average 20% in the past five years, SG Asset Management has taken a stake in SBI Fund Management, the asset management subsidiary of State Bank of India

ASSET BREAKDOWN: A ROBUST AND WELL-BALANCED MODEL

(SBI), India's largest bank, which has around 105 million customers and a 28% share of the deposit market.

The same rationale applies to all four partnerships: SG Asset Management brings its expertise in research, asset allocation, product design and risk control; its partners provide the Group with new distribution capabilities through their client base. The partnerships give SG Asset Management access to nearly 350 million potential clients in Asia, a market set to drive future growth.

SGAM Fund, bringing together all SG Asset Management's expertise

Sogelux, SG Asset Management's Luxembourg-based umbrella fund, was renamed SGAM Fund in 2004, giving a new momentum to the fund's future development.

In recent years, the open-ended fund has successfully combined the international management expertise that SG Asset Management has developed in its four centers around the world.

SGAM Fund offers clients innovative and high-return investment solutions in all financial markets and in all asset classes (equities, bonds, diversified, money market, index-linked) through a range of 58 sub-funds. Investors can switch from one sub-fund to another free of charge and hedge the currency risk (units in euro/dollars/yen). At end-December 2004, 92% of the assets under management in the Luxembourg fund were ranked in the first and second three-year performance quartiles for their category. SGAM Fund, the Group's flagship product, is authorized for sale in 19 countries in Europe, the Middle East, Asia and the Americas. Assets under management totaled USD 7 billion at end-December, a twofold increase on the end-December 2003 figure.

—

SOCIÉTÉ GÉNÉRALE GROUP - 2004 ANNUAL REPORT

Private Banking

Wealth management services, offering estate planning and investment products to clients with minimum financial assets of EUR 1 million or showing significant potential to reach this threshold.

Expansion of Private Banking

The Private Banking business expanded in 2004, with new money inflows amounting to EUR 4.9 billion, equal to 11% of assets under management at end-2003. Highlights of the year include:

• the successful integration of recently-acquired companies (Compagnie Bancaire Genève, Banque de Maertelaere and Chase Trust Bank in Japan) and the gradual exploitation of cost and revenue synergies;

• the resumption, after a pause brought on by the sluggish financial environment between 2001 and 2003, of selective CRM recruitment programs in markets offering the strongest growth potential: frontoffice teams grew 6% over the year, mainly in Asia. Organic growth projects aimed at capitalizing on existing operating platforms were also launched in France, the United Kingdom and the Middle East;

• a strong performance by most platforms in terms of attracting new clients and increasing their franchise.

Growth in the franchise

SG Private Banking is also enhancing its franchise by:

• pursuing an opportunistic and selective acquisition strategy focusing on the main European markets;

• promoting its activities and raising its profile among the Group's other business lines in an effort to boost client referrals: for example, it has implemented an action plan in conjunction with the Investment Banking division, and is gradually reinforcing relations with the Retail Banking outside France division under the internal partnership agreement signed in 2003.

Commercial responsiveness

SG Private Banking's commercial responsiveness is a major asset underpinning its growth:

• the broad range of alternative investment products backed by technical support made available by SG Asset Management enables SG Private Banking to offer its clients performances that meet their expectations for this

Development of estate planning —

Each year, in France, the multidisciplinary team of 12 estate planners meets with nearly 500 entrepreneurs who are planning to sell or transfer their company. This major initiative is underpinned by a global offer of services and generated inflows of nearly EUR 1 billion in 2004.

STRATEGY

• PROMOTE a competitive development model based on a global approach to client needs and a range of innovative products and services.
• USE the offering as a springboard for rapid growth, helping SG Private Banking become a leading player in the most buoyant markets, primarily Europe and Asia, where most of SG Private Banking's resources are located.
• CONTINUE optimizing efforts aimed at combining productivity gains and high-quality services.
• ADAPT and enhance SG Private Banking's compliance and audit structure in response to the new regulatory requirements and the compliance risks specific to its business.

type of investment, in a controlled risk environment;

• a personalized advisory service and a sophisticated, comprehensive range of products and services, which have attracted a growing number of entrepreneurs seeking to realize their commercial assets, notably in France.

Improving profitability and the quality of service

One of the priorities is to enhance the organizational structure of SG Private Banking's various platforms and improve their IT in order to provide more efficient tools capable of increasing competitiveness:

• in the United Kingdom, SG Hambros improved its productivity and rationalized its future investments by centralizing its IT and transaction processing functions for the London, Jersey, Guernsey and Gibraltar operations;

• in Asia, the centralized operating platform set up in Singapore has helped improve and standardize the quality of services and also meets the changing expectations of clients. In 2005, SG Private Banking Asia's highly competitive infrastructure will allow it to take full advantage of the strong growth expected in the region, in particular by improving the efficiency of future onshore development projects.

Asset inflows were partially eroded by the negative exchange rate effect. Assets under management increased by EUR 3.3 billion (+7.4%). Gross operating income totaled EUR 131 million (+54%), due to a combination of fast revenue growth (+23%) and controlled costs (cost/income ratio of 72%).

Development of product synergies

—

With the enhanced relations between Private Banking and the Group's other business lines, SG Private Banking Suisse, in particular, has started to step up its marketing of SGAM funds and structured products, and to offer specialized financial services.

ASSETS UNDER MANAGEMENT

EUR 48.4 billion in assets under management

—

1,875 staff —

39 offices in 21 countries —

Global Securities Services for Investors (SG GSSI)

The securities market is currently undergoing radical changes, including globalization. Remote access to the main financial markets has been facilitated, the separation of market infrastructures and the dividing line between securities and derivatives is becoming blurred, and European stock markets are consolidating. Securities custodians need to overhaul their traditional range of services if they are to accompany their clients in this changing environment.

An innovative range of services

Against this backdrop, Société Générale incorporated all the Group's securities expertise into SG GSSI in February 2004. It is now able to offer clients a wide range of services covering all securities activities, in all the major international markets and in all asset classes. Société Générale's securities business also includes the expertise developed by Fimat, one of the world's leading brokers in listed derivative products, and its expertise in domestic and international custody services, mutual funds trustee, fund administration with Euro-VL, and securities services for the corporate sector.

A client-oriented structure

SG GSSI comprises five client/ product divisions covering all investors' needs.

The Brokerage division, centered on Fimat, has a large execution and clearing capability in all markets and offers a comprehensive range of prime brokerage services (all brokerage functions, extended to include value-added services such as financing, collateral management, and electronic reporting and reconciliation tools).

The Global Custodian division offers an integrated service covering custody, trustee and fund

administration for all types of mutual funds and in all asset classes.

The Investment Banking Services division provides clearing and settlement/delivery services for equity market transactions on behalf of Société Générale and other investment banks and brokers.

The Corporate division offers issuers full securities services, in particular the management of international stock options plans and registered securities accounts, corporate financial services and organization of shareholders' meetings. Its subsidiary, Epargne Services Entreprises, is responsible for managing employee savings accounts.

The Retail Banking division provides full custody services for the individual customers of retail banks or e-brokers, using a highly efficient multi-establishment processing platform.

An integration model that promotes synergies

The creation of SG GSSI has given rise to a major program of synergies aimed at rationalizing the existing platforms and creating a new multi-market clearing and risk management service for all traded instruments.

Euro-VL, a French market leader, branching out in Europe —

Euro-VL specializes in fund administration services. With offices in France, Luxembourg and Ireland, Euro-VL is active in all types of mutual funds and investment portfolios, irrespective of where they are domiciled, for fund management companies and institutional investors. Its range of services covers all aspects of fund administration and valuation, legal reporting, compliance assistance, administrative services for asset management companies and transfer agent services.

STRATEGY

• EXTEND our global multi-product (securities and derivatives) clearing and brokerage services.
• CONTINUE to expand our securities trustee, custody and fund administration services in Europe.
• OFFER an international outsourcing service to investment banks and brokers.
• DEVELOP the services provided to issuers internationally.

Rated Aa2 (MQ) by Moody's for Trustee & Custody Paris Rated CU2 by Fitch Ratings for Global Custody Paris Rated TR2+ by Fitch Ratings for Trustee Paris

A leading player offering recognized service quality

The Global Custodian division is ranked 4th in Europe and 10th worldwide in terms of the size of its custody operation. The last few years have seen a substantial increase in the value of assets under custody, which stood at EUR 1,115 billion at year-end 2004. The number of mutual funds managed also rose sharply, to 2,175 at end-December 2004. In recent years, the Global Custodian division has regularly received awards for the quality of its services. In 2004, it was named "Best Global Custodian 2004", in the annual survey by Global Custodian magazine and in the R&M Consultants survey. Fimat is ranked among the top three brokers for listed derivatives in Europe on the Euronext and Eurex markets and among the top five in the United States on the Chicago Mercantile Exchange and Chicago Board of Trade market. It is number one in Australia on the Sydney Futures Exchange. The Corporate division is number one in France for stock option plan management (more than 400,000 beneficiaries) and number two in employee savings, with 8,000 corporate clients and 1,800,000 employee accounts under management.

Fimat, a world leader in listed derivatives, is reinforcing its OTC (1) brokerage business —

Fimat offers international investors a full range of execution, clearing and settlement services in the listed derivatives, equities and OTC markets (commodities, forex) worldwide. A member of 44 derivatives markets and 13 equities markets around the globe, Fimat handled more than 600 million derivatives contracts for its clients in 2004, and now commands a global clearing market share of nearly 7% on the markets of which it is a member.

In 2004, Fimat confirmed its positioning as an international broker with a value-added offer that includes prime brokerage and personalized solutions tailored to its clients' requirements. Fimat was awarded the "Best Execution – Futures" prize in the Alternative Investment Albourne Awards in 2004 in recognition of its high-quality offer.

(1) OTC: Over-The-Counter.

4th largest European securities custodian 10th worldwide with EUR 1,115 billion under custody —

7% of clearing volumes in listed derivatives in markets where Fimat is a member —

7th largest

brokerin US listed derivatives (Futures Commission Merchant - December 2004) —

Present in 25 stock markets —

Boursorama

Boursorama is a 71%-owned subsidiary of Société Générale and is listed on Euronext Paris.

Boursorama is a major European player in online savings with 228,000 accounts and 3.7 million orders executed in 2004. Boursorama allows individual investors to manage their savings autonomously via the Internet and offers a wide range of financial products (equities, warrants, options, futures, mutual funds, life insurance, trackers, bonds, certificates) and services (Internet access to the major international financial markets, GTS – a trading application – WAP, telephone and Minitel access).

In France, Boursorama is the market leader in its two activities, with a range of products based on two complementary brands: • Boursorama.com, the benchmark portal for online financial information, enjoys an extremely high audience with 2.3 million unique visitors per month (source: SmartAdServer);

• Boursorama Invest, the number one in online broking, has 115,000 accounts and executed 2.6 million orders in 2004.

The decline in the number of transactions (-6%) due to the

sluggishness of the French markets was offset by the growth in recurrent revenue from the Media business and sales of financial products. For example, the last few months have seen a sharp increase in the sale of new life insurance contracts: Boursorama Vie now has 3,500 contracts (including 1,750 new clients) for over EUR 102 million in deposits (vs. EUR 25 million in mid-September 2004).

Internationally, all the Group's foreign entities are ranked 3rd or 4th in their respective markets, helping Boursorama to consolidate its European position and paving the way for the subsidiary to seize further development opportunities.

Despite a mixed market environment in 2004, Boursorama was able to demonstrate the solidity of its earnings capacity and justify its strategy of branching out into the savings sector. The Group expects to achieve double-digit growth in activity and an improvement in its cost/income ratio, for a level of activity equivalent to 2004.

SAVINGS/MEDIA MODEL TARGET ONLINE SAVINGS CLIENTS

REVENUE BREAKDOWN Brokerage revenues Recurrent revenues (*) Media revenues Other 71% 18% 7% 4% ■ FRENCH LEADER in online brokerage ■ SUCCESSFUL DIVERSIFICATION into savings ■ CURRENTLY REINFORCING international positions ■ SHARP INCREASE in media revenue

(*) Including dormant account fees, interest income and savings income.

ACTIVITY 2004 GLOBAL INVESTMENT MANAGEMENT AND SERVICES 102_103

Stephen Dean Born 1968 in Paris, France Equation (7280), 1995 Abacus painted with acrylics 51 x 508 cm

Corporate & Investment Banking*

In 2004, Société Générale's Corporate & Investment Banking division (SG CIB) successfully continued to implement its profitable growth strategy.

3rd largest

corporate and investment bank in the euro zone by pre-tax profits —

A reference bank

• in its 3 areas of focus:
• euro capital markets
• derivative products
• structured finance

SG CIB, Société Générale's Corporate and Investment Banking arm, put in excellent financial and commercial performances in 2004. Bolstered by a favorable credit risk environment, SG CIB achieved 38.7% growth in net income and posted an ROE of 41.4%, making it one of the most profitable banks in its sector in Europe. Despite continued tight competition in the market, SG CIB significantly reinforced its leading position in Europe in capital markets and reasserted its global leadership in derivatives and structured finance.

These achievements are the result of the profitable growth strategy that SG CIB has been pursuing for the past two years. Under this framework, the division has taken steps to identify new development projects, increase innovation and improve its organization, with the aim of lifting its medium-term growth prospects.

SG CIB is one of the most profitable corporate and investment banks in the euro zone

A presence spanning some 45 countries —

9,000 staff —

—

Corporate and Investment Banking

SG CIB's profitable growth strategy has continued to deliver results in its four main areas of development

Products

SG CIB reasserted its expertise and leadership in its three target businesses.

Euro capital markets: one of the best banks in Europe

SG CIB continued to make progress in this field, reflecting the increasing success of its debt, equity or hybrid products with issuers and investors alike.

■ In Europe, SG CIB ranked in the top five (1) in the main client and product segments of euro debt capital markets, despite a drop in the volume of corporate issues with respect to 2003. SG CIB ranked:

• No. 5 for euro bond issues;
• No. 4 for corporate bond issues; • No. 5 for bond issues by finan-
• cial institutions; • No. 2 for securitization;

• No. 1 for managed synthetic CDOs (Collateralized Debt Obligations);

• No. 4 for structured EMTN (2);

• No. 8 for syndicated loans in the EMEA region (Europe, Middle East and Africa).

The Bank improved on its 2003 positions in all these categories, continuing its steady rise since 2001.

In equity capital markets, the volume of equity issues increased sharply over the year, with a number of privatization programs and mid-cap flotations adding to the strength of the primary equity market. Convertible or exchangeable bond issues, however, remained low. Overall, SG CIB ranked 12th in equity capital markets in the EMEA region (3).

• In France, SG CIB is the market leader in (4):
• equity research,
• equity capital markets,
• the secondary equity market,
• debt capital markets.

It has also achieved strong rankings in Mergers and Acquisitions.

Derivatives: confirmation of our global leadership

Drawing on its strong expertise and tradition for innovation, SG CIB achieved particularly strong results in derivatives, which are used by clients as both an investment and risk management product.

■ SG CIB is an unrivalled global leader in equity derivatives and was voted "Bank of the Year 2004" by three key publications (5). This reco-

(1) Source: IFR, December 2004; EMTN*, December 2004;* CréditFlux*, September 2004. (2) Euro Medium Term Notes. (3) Source:* IFR/Thomson Financial, December 2004.

(4) Source: Extel, June 2004; Euromoney, July 2004, Euronext, January 2005. (5) Risk Magazine, January 2005; IFR, December 2004; The Banker, September 2004.

STRATEGY

SG CIB

Banking Patrick Soulard

Jean-Pierre Mustier

and Investment Banking Jacques Bouhet

Deputy Chief Executive Officer of SG Corporate and Investment

Deputy Chief Executive Officer of SG Corporate and Investment Banking, in charge of Corporates and Financial Institutions Thierry Aulagnon

Chief Executive, Global Investment Banking Division Europe Marc Breillout

President and Chief Executive Officer

Global Head of Equity Derivatives

Chief Executive Officer of SG Americas

Deputy Global Head of Corporates

Jean-Jacques Ogier

Benoît Ottenwaelter

and Institutions Yves Thieffry Chief Operating Officer

Global Head of Debt Finance Kim Fennebresque

of SG Cowen Jean-Pierre Lesage Chief Financial Officer Christophe Mianné

Chief Executive Officer of SG Corporate

In 2004, SG CIB continued its drive to achieve profitable growth through its main areas of development: ■ PRODUCT DEVELOPMENT

• TARGETED GEOGRAPHICAL EXPANSION
• REINFORCED SALES DRIVE
• HARNESSING OF CROSS-SELLING SYNERGIES

gnition bears witness to the strong creativity of the equity derivative teams and to the Bank's leading positions in all product segments (1). In 2004, SG CIB continued to expand its range of structured derivatives on equities, indexes, baskets of shares and funds (Palladium, River Fund Next Level, Trigger, Jet, etc.). Lyxor Asset Management, SG CIB's subsidiary specializing in the management of structured funds, saw its assets under management rise 58.6% year-on-year, to a total of EUR 43.3 billion.

■ SG CIB ranks among the top five global banks in interest rate, credit and foreign exchange derivatives, and has leading positions in more than 20 product categories (1). In foreign exchange, the recent reorganization of the centers in Paris, London, Zurich, New York, Montreal, Toronto, Sao Paulo, Sydney and Tokyo has reinforced our positions in spot and FX options trading, as well as in the sale of FX products to corporate and institutional clients.

■ SG CIB was named "Crude Oil House of the Year" (2) in 2004, and ranked in the top three in various categories of commodity derivatives (3).

Structured finance: consolidation of our global positions

Against a backdrop of slow growth in the euro zone, corporate investment remained sluggish in 2004, despite a slight upturn at the end of the year. However, SG CIB was able to consolidate its positions across the board in structured finance: • in Export Finance, SG CIB was recognized as global leader for the third year running, and singled out for eight "Deal of the Year awards" (4);

• in Structured Commodity Finance, SG CIB was voted "Best Arranger" (4) for the second consecutive year, and won nine "Deal of the Year awards" (4);

• in Project Finance, SG CIB ranked 3rd in Europe (5).

• in Leveraged and Acquisition Finance, SG CIB ranked 5th in Europe (5), a significant improvement on 2003.

Targeted geographical expansion

Europe

Building on its position as a reference player in the French market, SG CIB continued to expand its presence in Europe over 2004, focusing in particular on Germany, Spain, Italy and the UK. It made further investments in these areas, and carried out a number of major transactions.

■ In Spain, SG CIB maintained the strong positions achieved in 2003. The bank was named "Best Debt House" (6) in the Spanish market, and ranked No.1 for euro bond issues and No. 5 for syndicated loans (7). SG CIB also participated in various prominent transactions, notably the financing of EUR 300 million of rolling stock for a new metro line in Barcelona, for which SG CIB was the only foreign mandated arranger (8).

In derivatives, SG CIB confirmed its leadership in the Spanish warrants market for the 7th year running, with a market share of 43% by volume.

■ In Germany, SG CIB ranked No. 3 in corporate euro bond issues, No. 5 in bond issues by financial institutions and No. 11 in syndicated loans (9). The Bank also has solid positions in Equity Capital Markets, as demonstrated by the EUR 550 million convertible bond issue it arranged for Linde AG.

■ In Italy, SG CIB ranked No.12 for euro bond issues by financial institutions and No.1 in warrants, options linked to Italian indexes and to the Eurostoxx 50, convertibles and reverse convertibles (10). The Bank is now a qualified primary dealer, reinforcing its position in government bond issues.

(1) Risk Magazine, September 2004. (2) Energy Risk Magazine, March 2004. (3) Risk Magazine, September 2004: gasoline (Europe), fuel oil (Singapore), crude (Dubai), Electricity (French Options). (4) Trade Finance Magazine, June 2004. (5) IFR/Thomson Financial, January 2005. (6) Euromoney, July 2004. (7) IFR/Thomson Financial, January 2005. (8) Madrid Stock Exchange, December 2004. (9) IFR/Thomson Financial, January 2005.

(10) Risk Magazine, September 2004.

SG CIB: a reference bank in euro capital markets, derivatives and structured finance.

GEOGRAPHICAL BREAKDOWN OF CLIENT-DRIVEN REVENUES IN 2004

■ In the UK, SG CIB strengthened its position with its clients. It took part in a securitization program for Tubelines, a private consortium that maintains and operates a number of London Underground lines under a 28-year public-private partnership.

Americas

SG CIB continued its expansion in this highly competitive market, targeting sectors where it has a strong commercial advantage (hotels and leisure, sport and aeronautics), and reinforcing selected relationships with large multinationals. This strategy delivered excellent results, with a number of major client transactions over the year. The bank arranged USD 5.8 billion of financing for Cemex, one of the three largest cement manufacturers in the world, and issued USD 2.7 billion of ABS (Asset-Backed Securities) for GMAC. In M&A, SG CIB advised Koch Industries in its takeover of Invista. SG Cowen ranked No.1 in 2004 by number of equity issues in its target sectors (aerospace, defense, healthcare, media and communications, technology, consumer growth).*

Asia-Pacific

SG CIB profited from the high growth levels seen in Asia in 2004 and carried out a number of major transactions for both local and international clients, demonstrating its strong leadership in the region in derivatives and structured finance.

In Structured Finance, SG CIB arranged a USD 414 million loan for Eastern Media Company, which was awarded "Finance Deal of the Year in Asia" (1).

The Bank also financed a motorway construction project for the Australian consortium, ConnectEast, in the amount of AUD 2.1 billion, elected "Project Finance Deal of the Year" in Aus-

* Source: Equidesk, December 31, 2004. (1) Asiamoney*, December 2004.*

INNOVATIVE PRODUCTS, TAILORED TO THE NEEDS OF OUR CLIENTS

■ Euro capital markets ■ MIX & MATCH: an innovative structure set up as part of France Télécom's offer for Wanadoo and including an IPO for Pages Jaunes ■ DEBT ADVISORY SERVICES: an original advisory approach designed to meet the debt and financing needs of SG CIB clients ■ TRENDS: a high quality publication comprising research in equities, credit, forex and interest rates, the economy and commodities. Awarded the 2004 prize by the Union des journalistes et journaux d'entreprises in France.

tralia and "Most Innovative Deal (1) for 2004". SG CIB was mandated arranger for a USD 397 million loan to finance the construction of a hotel in Macao, which was named "Syndicated Loan of the Year" (2).

In Equity Derivatives, SG CIB continued its expansion drive in Asia, focusing in particular on India and China. In the latter case, the bank was the first foreign institution to structure a 100% capital-guaranteed fund, launched for a Chinese bank (Harvest Pu-An Capital Guaranteed Fund).

Reinforced sales drive

The Corporates and Institutions Division, set up in 2002, continued to reinforce and coordinate SG CIB's commercial effort over the year. Since 2003, the portion of client-driven revenues has risen steadily to nearly two thirds of total net banking income and is now well balanced between corporate clients and financial institutions. In the past two years, client-driven revenues have risen 13%*, in line with the three-year target set in 2003.

Systematic development of cross-selling synergies

Since 2003, SG CIB has set its business lines annual targets for cross-selling revenues, and in 2004, it worked actively to increase additional revenues from synergies with other Group entities.

A number of initiatives and transactions bear witness to the strength of this cooperation. For example, by pooling its technical expertise in asset finance with the Retail Banking division's close customer relationships, SG CIB was able to set up a competitive, innovative and flexible financing deal to fund Sitram's rolling stock (3).

* At current exchange rates. (1) Finance Asia, December 2004. (2) The Asset, December 2004. (3) Syndicat Intercommunal des Transports de l'Agglomération Mulhousienne (Mulhouse municipal transport syndicate).

SG CIB and the Retail Banking division have also extended their joint operations to provide SME customers with currency and interest rate hedging products tailored to their needs.

Effective management of credit and market risk

The credit environment remained favorable in 2004, enabling SG CIB to reduce its risk provisioning to an all-time low. How-

REVENUE MIX (CLIENT-DRIVEN AND TRADING) IN 2004

■ Derivatives ■ ALTERNOVA: 1st mutual fund for individual investors that replicates the composition of the MSCI Hedge Invest Index ■ HARVEST PU-AN CAPITAL GUARANTEED FUND: 1st fund structured by a foreign institution with a 100% capital guarantee from a Chinese bank ■ EURO MTS GLOBAL MASTER UNIT: 1st ETF (1) that replicates the performance of euro-zone government bonds.

(1) Equity tracker fund.

■ Structured Finance ■ SINOSURE: ZTE Corporation, 1st export loan financed by a non-Chinese bank and guaranteed by Sinosure, the Chinese export credit agency ■ PUBLIC-PRIVATE PARTNERSHIPS: adviser to the French government in the first contracts of this type in France ■ INFRASTRUCTURE INVESTORS: one of the first European secondary investment funds for publicprivate partnerships.

SOCIÉTÉ GÉNÉRALE GROUP - 2004 ANNUAL REPORT

ever, the bank continued to actively manage its credit portfolio exposure. SG CIB maintained its VaR (1) at moderate levels over the financial year and more or less stable on 2003.

Original measures to accelerate SG CIB's pace of growth

As a result of its profitable growth strategy, SG CIB was able to make a significant contribution to Group earnings in 2003 and assert its position as one of the leading corporate and investment banking players in Europe. Throughout 2004, it concentrated on intensifying this strategy through the implementation of a number of projects designed to encourage greater initiatives from its employees.

New development projects

In 2004, SG CIB initiated a series of new development projects aimed at boosting its medium-

(1) Value at Risk.

term performance and growth prospects.

It notably announced its decision to roll out a high yield finance business in Europe in order to complete its debt product offering in the region, and to extend its European property finance business. In Italy, SG CIB aims to replicate the development strategy that has already proved successful in Spain and Germany. The bank is also strengthening its relationships with financial institutions, and improving its sales coverage of this segment by recruiting top-level staff in Europe and Asia. It has launched a project entitled "China 2008" aimed at expanding its capital market and derivatives activities to take advantage of the country's high growth rates.

Growth through innovation

SG CIB's ability to develop innovative products has made it one of the leading global players in a number of fields, and remains one of its key distinguishing features. As part of the Group-wide initiative to encourage innovation, SG CIB has set up its own program to encourage the development of new and original activities, products, services and methods of organization.

Ongoing improvement of the internal organization

While maintaining a strict policy of cost control, SG CIB has developed an original system, entitled "Boost", designed to optimize internal processes and thereby improve the organizational structure. In 2004, the system was implemented in a number of key functions such as risk management, recruitment, cost management and the transaction approval circuit. The aim is to increase the quality and speed of execution and free up resources that can be used for the development of the business.

These internal measures should help to support the planned increases in business volumes, while at the same time keeping the cost/income ratio at a competitive level.

Success of the profitable growth strategy

The profitable growth strategy, implemented over the past two years, continued to deliver results in 2004. The division was able to post excellent financial results combined with market share gains in Europe, the US and Asia. The strategy was bolstered in 2004 with a number of new initiatives, enabling SG CIB to achieve recognition as an employer of choice and a provider of high quality client services, while at the same time generating substantial profits for the Group and its shareholders.

ACTIVITY 2004 CORPORATE AND INVESTMENT BANKING 110_111

P. 92: Fondation Antoni Tapies, Barcelona P. 97 and 107: Harrison & Wolf

Photos

Adagp, Paris 2005 - Jean-Marie Cras - Getty Images - Dieter Kik - Edouard Legros - Mark Lyon - Patrick Messina - Alistair Overbruck - Pascal Quennehen - Benoît Roland - Thomas Ruff - Société Générale - Véronique Védrenne - Philippe Zamora - Yi Zhou - DR.

Design and production L'Agence Synelog - Paris - 33 (0)1 53 00 74 29

Printers Fot - Lyon

Financial Information 2004

Simplified organizational chart	114
Consolidated Financial Statements	115
Group management report	115
Risk management	133
Regulatory ratios	150
Report of the Chairman on internal control procedures
and report of the Statutory Auditors	153
Consolidated financial statements	164
Notes to the consolidated financial statements	168
Report of the Statutory Auditors on the
consolidated accounts	209
Parent Company Financial Statements	210
Financial statements of Société Générale	210
Five-year financial summary	215
List of subsidiaries and affiliates	216
Report of the Statutory Auditors on the annual
financial statements	224
Information on common stock	225
Major changes in the investment portfolio	233
Activities of principal subsidiaries and affiliates	234
Notes to the consolidated financial statements
for 2004 following the application of IFRS	241
Special report of the Statutory Auditors	272
LEGAL INFORMATION 2004	273
Reference document cross-reference index	311

Société Générale Group main activities

Simplified organizational chart at December 31, 2004

o per proviGENERALE
GROUP

	RETAIL BANKING AND FINANCIAL SERVICES			GLOBAL INVESTMENT MANAGEMENT AND SERVICES		CORPORATE ANDINVESTMENT BANKING
	RETAIL BANKING	FINANCIAL SERVICES	ASSET MANAGEMENT	PRIVATE BANKING	GLOBAL SECURITIES SERVICES
FRANCE	Société Générale*SogeleaseFrance 100%Crédit du NordGroup 80%Sogébail 45%CompagnieGroupamaGénéraleBanque 40%d'Affacturage100%Sogéfinancement100%Banque de Polynésie 80%Société Générale Calédoniennede Banque 100%Banque Française Commerciale"Océan Indien" 50%SG de Banque aux Antilles 100%	FranfinanceGroup 100%CGI Group 100%ECS Group 100%Sogécap 100%Sogessur 65%	SG AssetManagementGroup 100%BAREP 100%BAREP AssetManagement100%	Société Générale*	Société Générale*FIMAT Banque100%Parel 100%BoursoramaGroup 72%Euro VL 98%	SociétéGénéfimmoGénérale*100%CALIF 100%Généfim 100%SG SecuritiesSogéprom 100%(Paris) SAS 100%Coprim 100%SG CapitalSG OptionDéveloppementEurope 100%100%Lyxor AssetManagement100%
EUROPE	SKB Banka - Slovenia 100%BRD - Romania 58%SG Express Bank - Bulgaria 98%Komercni Banka Group -Czech Republic 60%General Bank of Greece - Greece50%Banque SG Vostok - Russia 100%	ALD InternationalGroup 100%GEFA GroupGermany 100%Fiditalia - Italy100%SG EquipmentFinanceInternational 100%	SGAM Group Ltd -United Kingdom100%SG Russell AssetManagement -Ireland 50%	SGBT Luxembourg100%SG Private Banking(Suisse) SA 78% (1)SG Banquede MaertelaereBelgium 96%SG Hambros Bank& Trust Limited -United Kingdom100%	FIMAT FrankfurtBranch 100%FIMAT Banque UK100%	Société Générale*Branches in:Milan - ItalyFrankfurt - GermanyMadrid - SpainLondon - United Kingdom
AMERICAS	Banco Société Générale - Argentina100%		TCW Group -United States 67%		FIMAT USA 100%	SG Americas,SG Canada 100%Inc. - UnitedBanco SG BrasilStates 100%SA 100%SG Cowen & Co,Société Générale*LLC - UnitedBranches in:States 100%New York -SG AmericasUnited StatesSecurities, LLCUnited States100%
MIDDLEEAST &AFRICA	SG MarocaineSSB Banka -de Banques 52%Ghana 51%SG de BanquesSogeleaseen Côte d'IvoireMaroc -68%Morocco 100%SG de BanquesBFV SGau Sénégal 58%Madagascar70%SG de Banquesau CamerounUIB - Tunisia58%52%SG de BanqueNSGB - Egyptau Liban 50%54%	Eqdom - Morocco54%La Marocaine Vie87%
ASIAAUSTRALIA			SGAM Japan 100%	SG Private Banking(Japan) Ltd 100%	FIMAT Asia Pte Ltd100%FIMAT Hong Kong100%FIMAT Sydneybranch 100%	SG SecuritiesSG AsiaAsia International(Hong Kong) LtdHoldings Ltd100%(Hong Kong)SG Australia100%Holding Ltd 100%SG SecuritiesSociété Générale*North Pacific,Branches in:Tokyo Branch -SingaporeJapan 100%Tokyo - JapanKorean FrenchHong KongBanking Corp. -Sydney (AustraliaSogéko - SouthBranch)Korea 41%

(1) Subsidiary of SGBT Luxembourg.

* Parent company.

Notes:

- % share of capital held by the Société Générale Group.

- Groups are listed under the geographical area in which they carry out their main activities.

Group management report

Group activity and results

2004 saw strong economic growth worldwide but an uncertain economic environment in Europe, a lack of clear-cut trends in the equity markets and a decline in interest rates and the dollar. The volume of deals by European corporates remained limited, notably on the equity capital markets. However the credit risk environment proved very favorable.

In this context the Group recorded very strong results. Gross operating income stood at EUR 5,449 million for the year, up sharply by 12.7% (1)* compared to 2003, while net income rose by 25.4% to EUR 3,125 million.

Group ROE after tax stood at 18.9%, versus 16.2% in 2003.

Summary consolidated income statement

In millions of euros	2004	2003	Change
Net banking income	16,416	15,637	+5%
Operating expenses	(10,967)	(10,568)	+4%
Gross operating income	5,449	5,069	+7%
Net allocation to provisions	(541)	(1,226)	–56%
Operating income	4,908	3,843	+28%
Net income from long-term investments	119	397	–70%
Net income from companies accounted for by the equity method	42	43	–2%
Exceptional items	(20)	(150)	–87%
Amortization of goodwill	(186)	(217)	–14%
Income tax	(1,398)	(1,161)	+20%
Net income before minority interests	3,465	2,755	+26%
Minority interests	(340)	(263)	+29%
Net income	3,125	2,492	+25%
ROE after tax	18.9%	16.2%

The Group integrated the following companies in 2004:

• In Retail Banking outside France: General Bank of Greece (GBG) through a majority stake (50.01%) and Sogelease Egypt through a 61.73% stake;

• In Financial Services: integration of all the Equipment Finance and Factoring activities of the Norwegian group Elcon together with Sagem Lease and Rusfinance.

Net banking income for the year stood at EUR 16,416 million. In relation to 2003, this represented a 6.0% (1)* increase (+5.0% in absolute terms). Revenue at the Corporate & Investment Banking arm was stable in relation to 2003, which represented a high base; revenue in all the other businesses was up, particularly in the Group's growth drivers – Retail Banking outside France, Financial Services and Global Investment Management & Services.

(1) Excluding the capital gain of EUR 187 million on the disposal of property booked under NBI in Q1 03.

* When adjusted for changes in Group structure and at constant exchange rates.

SOCIÉTÉ GÉNÉRALE GROUP - 2004 ANNUAL REPORT

Group management report

Operating expenses rose by 2.9%* compared to 2003, reflecting continued emphasis on investment and tight cost control. In absolute terms, the increase stood at 3.8%, reflecting the impact of acquisitions.

The Group's 2004 cost/income ratio stood at 66.8%, down from 68.4% (1) in 2003.

Gross operating income rose by 12.7% (1)* to EUR 5,449 million compared to 2003 (+7.5% in absolute terms).

Net allocations to provisions stood at a low level, reflecting a favourable credit environment and specific factors within the Group, namely: systematic diversification of the business unix, improved risk management and conservative provisioning of risk exposure. In 2004, the cost of risk in the French Networks stood at 32bps of riskweighted assets, thereby confirming the structural improvement in the Group's risk profile. Corporate & Investment Banking booked a net write-back of EUR 60 million for the year as a whole, achieved exclusively through the write-back of specific provisions on loans redeemed or sold, with no write-back from the general credit risk reserve.

Group operating income in 2004 stood at EUR 4,908 million, up 36.2% (1)* compared to 2003 (+27.7% in absolute terms).

In a stock market environment lacking clear-cut trends, and in the absence of major deals, net income from long-term investments stood at EUR 119 million over the year.

After goodwill amortization, corporate income tax (effective annual tax rate of 28%) and minority interests, net income totaled EUR 3,125 million for the quarter, up 25.4% on 2003.

Group ROE after tax stood at 18.9% in 2004, versus 16.2% in 2003.

Net earnings per share stood at EUR 7.65 in 2004, up 26% compared to 2003.

Activity and results of the businesses

The financial statements of each core business are drawn up in accordance with those of the Group in order to:

• determine the results of each core business as if it were a standalone entity;

• present a true and fair view of each business' results and profitability over the period.

The core businesses correspond to the three key businesses of the Group's development strategy:

• Retail Banking and Financial Services;
• Global Investment Management & Services;
• Corporate and Investment Banking.

In February 2004, the Group established SG GSSI, a new division handling the securities business, including securities services and listed derivative products. SG GSSI is part of GIMS, the Group's investment management arm. The Group's results are presented in accordance with the new management structure. All historical data for the business lines have been adjusted accordingly.

The core businesses break down as follows:

■ Retail Banking and Financial Services, including the Société Générale and Crédit du Nord networks in France, Retail Banking outside France, the Group's business finance subsidiaries (vendor finance, IT asset leasing and management, operational vehicle leasing and fleet management), consumer credit and life and non-life insurance activities.

■ Global Investment Management & Services, including Asset Management, Private Banking, Boursorama and the newly established securities business. The latter includes the activities of Fimat, the Group's brokerage arm specializing in derivatives markets, together with the securities and employee savings businesses.

■ Corporate and Investment Banking, which covers two types of activity:

• Corporate Banking and Fixed Income, including:

– The Debt Finance platform, which includes the structured finance (export finance, project finance, acquisition finance, property finance, financial engineering), debt, currency and treasury activities; – Commodity finance and trading;

– Commercial banking (notably, plain vanilla corporate loans).

(1) Excluding the capital gain of EUR 187 million on the disposal of property booked under NBI in Q1 03.

* When adjusted for changes in Group's structure and at constant exchange rates.

• Equity and Advisory activities comprising:
• Equity activities (primary market, brokerage, derivatives, trading);
• Advisory (mergers and acquisitions);
• Private equity.

In addition, the Corporate Center acts as the central funding department of the Group's three core businesses. As such, it recognizes the cost of carry of equity investments in subsidiaries and related dividend payments, as well as income and expenses stemming from the Group's asset/liability management (ALM) and the amortization of goodwill. Furthermore, income from the Group's industrial equity and real estate investment portfolios, as well as from its equity investments in banks, is allocated to the Corporate Center, as are income and expenses that do not relate directly to the activity of the core businesses (activities in the process of being developed: for example, Groupama Banque).

The principles used to determine the income and profitability of each core business are outlined below.

Allocation of capital

■ The general principle used in the allocation of capital is compliance with the average of current regulatory requirements over the period, to which a prudential margin is added. This margin is set by the Group on the basis of an assessment of the risk relating to its business mix (i.e. capital representing 6% of risk-weighted commitments).

■ Capital is allocated as follows:

• In Retail Banking, capital is allocated on the basis of weighted risks. In the case of life insurance, the specific regulations governing this business are also taken into account;

• In Global Investment Management & Services, the amount of capital allocated corresponds to the larger of either the capital requirement calculated on the basis of weighted risks or the amount representing operating expenses for a three-month period, the latter being the regulatory standard in this business;

• In Corporate and Investment Banking, capital is allocated on the basis of weighted risks and the value at risk in capital market activities. For the majority of transactions, market risk is calculated using an in-house model validated by the French Banking Commission;

• Capital allocated to the Corporate Center corresponds to the sum of the regulatory requirement with respect to its assets (essentially the equity and real estate portfolios), and the surplus (or lack) of capital available at the Group level (the difference between the combined capital requirements of the core businesses, as defined above, and average Group capital after payment of the dividend).

Net banking income

Net banking income for each core business includes:

• Revenues generated by its activity;

• The yield on normative capital allocated to the core business, which is defined on an annual basis by reference to an estimated rate of return on Group capital during the financial year. On the other hand, the yield on the difference between the core business's book capital and its normative capital is reassigned to the Corporate Center.

Operating expenses

Each core business's operating expenses include its direct expenses, its management overheads and a share of the head-office expenses, which are fully redistributed between the core businesses.

The Corporate Center only books costs relating to its activity and a few technical adjustments.

Provisions

The provisions are charged to each core business so as to reflect the cost of risk inherent in their activity during each financial year.

Provisions concerning the whole Group and country risk reserves are booked by the Corporate Center.

Net income from long-term investments

Net income from long-term investments principally comprises capital gains realized by the core businesses on the disposal of securities, as well as income from management of the Group's industrial equity portfolio and its equity investments in banks.

Amortization of goodwill

Goodwill amortization expenses are booked by the Corporate Center.

Income tax

The Group's tax position is managed centrally, with a view to optimizing the consolidated tax expense.

Income tax is charged to each core business on the basis of a normative tax rate, which takes into account the local tax rate of the countries in which it conducts its activities and the nature of its revenues.

Summary of results and profitability by core business

2004 saw robust commercial activity in the French Networks, a strong expansion in the Group's growth drivers and excellent results in the Corporate and Investment Banking arm.

Income statement by core business

		Retail Bankingand Financial Services		GIMS		Corporate& InvestmentBanking		CorporateCenter & other		Group
In millions of euros	2004	2003	2004	2003	2004	2003	2004	2003	2004	2003
Net banking income	9,685	8,980	2,266	1,983	4,697	4,734	(232)	(60)	16,416	15,637
Operating expenses	(6,346)	(5,983)	(1,631)	(1,511)	(2,887)	(2,913)	(103)	(161)	(10,967)	(10,568)
Gross operating income	3,339	2,997	635	472	1,810	1,821	(335)	(221)	5,449	5,069
Net allocation to provisions	(589)	(647)	(8)	(13)	60	(510)	(4)	(56)	(541)	(1,226)
Operating income	2,750	2,350	627	459	1,870	1,311	(339)	(277)	4,908	3,843
Net incomefrom long-term investments	33	6	2	(10)	16	27	68	374	119	397
Net income from companiesaccounted for by the equity
methodExceptional items	50	130	00	00	280	170	9(20)	13(150)	42(20)	43(150)
Amortization of goodwill	0	0	0	0	0	0	(186)	(217)	(186)	(217)
Income tax	(955)	(805)	(193)	(138)	(449)	(295)	199	77	(1,398)	(1,161)
Net incomebefore minority interests	1,833	1,564	436	311	1,465	1,060	(269)	(180)	3,465	2,755
Minority interests	(218)	(187)	(44)	(21)	(6)	(8)	(72)	(47)	(340)	(263)
Net income	1,615	1,377	392	290	1,459	1,052	(341)	(227)	3,125	2,492
Average allocated capital	8,022	7,238	721	603	3,523	3,498	4,278	4,020	16,544	15,359
ROE after tax	20.1%	19.0%	54.4%	48.1%	41.4%	30.1%	–8.0%	–5.6%	18.9%	16.2%

Note: the results of the Global Investment Management & Services business are presented in accordance with the new management structure arising from the establishment of the securities business (SG GSSI - Global Securities Services for Investors), including securities services, Fimat and Boursorama. All historical data for the business lines have been adjusted accordingly.

In millions of euros	2004	2003	Variation
Net banking income	9,685	8,980	+8%
Operating expenses	(6,346)	(5,983)	+6%
Gross operating income	3,339	2,997	+11%
Net allocation to provisions	(589)	(647)	–9%
Operating income	2,750	2,350	+17%
Net income from long-term investments	33	6	x5.5
Net income from companies accounted for by the equity method	5	13	–62%
Income tax	(955)	(805)	+19%
Net income before minority interests	1,833	1,564	+17%
Minority interests	(218)	(187)	+17%
Net income	1,615	1,377	+17%
Of which:
Société Générale Network	805	738	+9%
Crédit du Nord Network	160	140	+14%
Financial Services	385	285	+35%
Retail Banking outside France	265	214	+24%
Cost/income ratio (%)	65.5%	66.6%
Average allocated capital	8,022	7,238	+11%
ROE after tax	20.1%	19.0%

Retail Banking and Financial Services

Retail Banking and Financial Services saw net income rise by 17% in 2004 for an ROE after tax of 20.1%, compared with 19% in 2003. These results reflected the excellent commercial and financial performances across the board in 2004.

French Networks:

revenue growth and recurrent profitability

The environment for the domestic retail banking business remained lacklustre in 2004, due to sluggish economic growth and stiff competition underpinned by 9 national networks, excluding post office branches. Interest rates reached record lows at the end of the year, and continued to weigh on net interest income.

Notwithstanding this context, the Société Générale and Crédit du Nord networks successfully pursued the expansion of their franchises and maintained revenue growth.

Regarding individual customers, the number of current accounts increased by +124,000 over the year, i.e. +2.2%, despite a nationwide banking penetration rate of almost 100%.

BREAKDOWN OF 2004 NET BANKING INCOME FOR FRENCH NETWORKS

In millions of euros

216 million contacts were recorded in 2004, representing a 20% increase on 2003, of which 95 million via Internet (+45%). Both networks continue to record stronger demand for direct channels than major competing brands (1).

Life insurance represented the main priority in terms of savings and investments, with new inflows of EUR 7.3 billion, i.e. +17.5%, compared to an overall market increase of +13%. 75,000 PERP accounts were opened, representing high quality production (average unit investment of EUR 700). New mortgage loans stood at EUR 12.8 billion, up by 8% over the landmark level achieved in 2003, and representing a twofold increase over 2000. The fierce competition required close scrutiny in terms of volume and interest margin. Between early 2000 and the end of the second quarter 2004 (the latest reference published by Banque de France), the combined outstanding loans of the Group's two brands increased at an annualized rate of 10.4%, above the rate of growth of the market (+8.4%).

The above trend also applies to short-term credit facilities to individual customers: over the same period, the outstanding amount of the latter increased by 7.2% on an annualized basis, versus 5% for the market.

Comparable sales dynamism underpinned our drive for business customers. Both networks maintained their market share in terms of lending, which has also increased since January 2000. Outstanding loans rose by 2.4% on 2003, against a backdrop of weak demand for investment loans and reduced use of short-term corporate credit facilities, reflecting the favorable cash position of most counterparties.

In financial terms, both networks recorded a 3.9% increase in NBI in relation to 2003.

Net interest income increased moderately in 2004 (+1% compared to 2003). The positive impact of the strong increase in sight deposits (+7.1%) was consistently offset quarter after quarter by the erosion of the interest margin on deposits due to the continued decline in longterm interest rates.

Commission income increased by 8.1% in 2004, with a sharp rise in financial commissions (+13.1%). The more moderate increase in service commissions (+6.5%) reflects a smaller price effect, lower than inflation. Both networks are seeking to maintain the competitive fee structure widely recognized in public surveys.

The Group continued to restructure its networks, with the opening of 49 Société Générale branches and 19 Crédit du Nord branches aimed at optimizing geographical coverage. Furthermore, as part of the rationalization of its platform, the Société Générale network pursued the centralization of its back offices: the number of local platforms fell from 136 to 111 between 2000 and 2004.

A tight rein was kept on growth in operating expenses (+3.2% over the year), notwithstanding continued investment – in line with objectives – aimed at improving productivity.

The cost/income ratio declined to 68.9% in 2004, versus 69.4% in 2003.

Gross annual operating income stood at EUR 1,823 million, up 5.4% compared to 2003.

The annual cost of risk declined and stood at 32 basis points in relation to risk-weighted assets, against 37 basis points in 2003.

Net income stood at EUR 965 million in 2004, up 9.9% over 2003, with ROE after tax at 20.3% in 2004, versus 19.7% in 2003.

Retail Banking outside France: confirmation of profitable growth potential

Retail Banking outside France is one of the Group's main growth drivers.

Development of this business rests on four underlying principles:

• investment and/or acquisitions in countries where the local banking market offers strong growth potential;
• distribution networks suited to local market conditions, with emphasis on long-term customer loyalty;
• strict risk management;

• a well-balanced geographical presence in order to ensure diversification of risk.

In 2004, the main geographical emphasis of this business continued to shift towards Europe: 70% of the arm's 2004 revenue was generated by subsidiaries in member states of the European Union or candidates for EU entry.

External growth continued in 2004, notably with the acquisition of a 50.01% stake in General Bank of Greece and the increase in the stake in the BRD (Banque Roumaine de Développement) (raised to 58.3%). Conversely, the disposal of the retail banking business in Argentina, a non-strategic market for the Group, was launched.

Organic growth plans were pursued, with particular emphasis on the European subsidiaries (Czech Republic, Romania, Bulgaria), as well as Russia and Egypt.

The franchise continued to record sustained growth: the arm now provides services to 5.4 million individual customers, of which 4 million in Europe. The net increase in 2004 stood at 458,000 when adjusted for changes in Group structure (i.e. +10% in relation to end 2003), of which +292,000 in Europe. Outstanding deposits and loans were up sharply by 9.1%* and 13.4%* respectively, with a particularly strong increase for individual customers.

This strong sales momentum was accompanied by emphasis on quality of service: Komercni Banka was named "Bank of the Year" at the MasterCard Bank of the Year awards in the Czech Republic.

BREAKDOWN OF 2004 NET BANKING INCOME BY REGION

Revenue rose sharply by 7.3%* between 2003 and 2004 (+16.3% in absolute terms). The annual NBI of the arm stood at EUR 1.979 million, representing 12% of Group NBI, versus 6% in 2000.

Operating expenses increased moderately (+3.1%* in relation to 2003), notwithstanding major investment aimed at further growth and productivity (opening of new branches, pooling of IT and electronic payment infrastructure).

Although temporarily penalized by the integration of the new Greek subsidiary, the cost/income ratio remained stable at 61.3% over the year.

Risk provisioning was again low, and stood at EUR 161 million in 2004.

Operating income rose by 20.5% over the year.

Net income increased by 23.8% in relation to 2003. ROE after tax was stable at a high level (33.0% in 2004, vs. 32.1% in 2003).

* When adjusted for changes in Group structure and at constant exchange rates.

Financial Services: increased contribution

The Group's Financial Services activities are mainly comprised of two business lines: Specialized Financing and Life Insurance.

Specialized Financing

Like Retail Banking outside France, Specialized Financing represents a major focus for development for the Group.

Following a series of acquisitions and investments in organic growth pursued in 2004, the business line has become a major diversified player in Europe, undergoing constant expansion. More than 60% of revenue is generated outside France. The three Specialized Financing businesses aimed at corporate clients rank among the top players in Europe.

The Group's consumer credit business has achieved a significant size. Annual revenue growth has been in excess of 26% since 2000. Despite the hesitant trend of the French market, new loan issuance increased by 10% compared to 2003, with particularly good performances at Franfinance and Fiditalia. Low interest rates underpinned margins on new loans. Outstanding loans increased by 16% for the year. There were two major highlights during the year, namely the launch of the business in Russia, and the agreement in principle for the acquisition in the last quarter of a 75% stake in Hanseatic Bank, the banking subsidiary of Otto, the German mail order company. The integration of Hanseatic Bank, the fourth largest player in the German consumer credit market, will double the Group's outstanding consumer loans in Germany.

Regarding the vendor and equipment finance business, the production of SG Equipment Finance saw a slight rise in new lending in 2004, as the healthy performance in Eastern Europe offset weak demand in Western Europe and the cost of risk remained favorable. SG Equipment Finance pursued its growth strategy over the year, with the acquisition of the Equipment Finance and Factoring business of Elcon Finans, the leading Norwegian player.

In operational vehicle leasing and fleet management, ALD Automotive pursued the expansion of its international network in 2004, with the establishment of entities in Switzerland, Ukraine, Russia, Romania, Slovenia and the Baltic countries. In the last quarter, ALD acquired Fleet Partner Nordic, a Swedish company managing a fleet

OUTSTANDING LOANS IN 2004 – (% change vs. 2003) In billions of euros

of 2,300 vehicles. With a total fleet of 558,000 vehicles at end 2004 (+9.5% compared to end 2003), ALD International ranks as the third in Europe (second in terms of outstanding loans).

New lending at ECS, the leading European player in IT asset leasing and management, was up 6% in relation to 2003, driven by its overseas business, particularly in Spain where ECS acquired the local subsidiary of the Parsys Group.

Overall, revenue generated by the Specialized Financing business line rose by 7.0%* in relation to 2003. ROE after tax stood at 18.7% for the year.

Life Insurance

In the Life Insurance business, Sogécap recorded a 17% increase in premium income in relation to 2003, which already represented a high base, above the average increase for the bancassurance sector in France (+14%). Its share of the bancassurance market therefore stood at 14.3% in terms of sales. Annual net banking income of the Life Insurance business rose by 26%* compared to 2003.

Overall, the Financial Services arm notched up 36.5% growth in annual operating income. Its ROE after tax stood at 15.6% in 2004, versus 13.4% in 2003.

In millions of euros	2004	2003	Change
Net banking income	2,266	1,983	+14%
Operating expenses	(1,631)	(1,511)	+8%
Gross operating income	635	472	+35%
Net allocation to provisions	(8)	(13)	–38%
Operating income	627	459	+37%
Net income from long-term investments	2	(10)	NM
Income tax	(193)	(138)	+40%
Net income before minority interests	436	311	+40%
Minority interests	(44)	(21)	x2.1
Net income	392	290	+35%
Of which:
Asset Management	234	188	+24%
Private Banking	92	67	+37%
GSSI + Boursorama	66	35	+89%

Global Investment Management & Services: strong increase in activity and results for the year

The Global Investment Management & Services arm includes asset management (SG AM), private banking (SG Private Banking), as well as securities businesses (SG GSSI) and on line brokerage (Boursorama).

The arm displayed strong growth momentum: net inflows stood at a record level of EUR 24.8 billion over the year, i.e. more than double the level achieved last year. At December 31, 2004, assets under management stood at EUR 315 billion; this amount does not include assets managed by Lyxor Asset Management (EUR 43.3 billion at December 31, 2004), whose results are consolidated under the Equity and Advisory business line, nor the assets of customers managed directly by the French Networks (approximately EUR 70 billion held by customers with investible assets exceeding EUR 150,000). Assets under custody at SG GSSI stood at EUR 1,115 billion at December 31, 2004, up 9% over the year. The number of lots handled by Fimat rose sharply in 2004 to 600 million contracts (+23% compared to 2003).

The arm's financial results also showed a sharp improvement, with operating income up 36.6% on 2003, and the cost/income ratio down sharply by over 4 points at 72.0%. Net income stood at EUR 392 million, up 35.2%.

ASSETS UNDER MANAGEMENT

In billions of euros

Asset Management

SG Asset Management is a global player with a strong positioning in the world's four main investment regions.

In 2004, SG Asset Management pursued its growth strategy based on the development of an innovative offering (notably in alternative investment and high alpha products), and the harnessing of growth drivers in the form of partnerships: in Asia, SG Asset Management strengthened its presence through the acquisition of Resona AM, the investment management subsidiary of the 5th largest Japanese banking group, and joint-venture agreements with IBK the Korean group and State Bank of India, India's largest banking group; overall, with its presence in China, SG Asset Management has direct access to 350 million potential new individual clients in Asia.

SG Asset Management's expertise is recognized and it was designated best Asset Manager in France by institutional investors for the second year running(1).

Net inflows of new money for 2004 tripled in relation to 2003, to stand at EUR 19.9 billion, with EUR 6.7 billion of this total invested in equity and diversified funds and EUR 3.2 billion invested in alternative investment vehicles; TCW made a particularly strong contribution (EUR 9.4 billion). Cross-selling between the various platforms accounted for EUR 6.7 billion.

Overall, assets under management at SG Asset Management stood at almost EUR 267 billion at end 2004, versus EUR 239 billion at end 2003, despite a negative currency impact of EUR 6.9 billion.

The breakdown of assets between institutional investors and retail clients remained well balanced. Assets managed for institutional investors totaled EUR 136.1 billion, representing 51% of total assets under management. Moreover, the geographic diversification of assets ensures a strong capacity to weather any crises on local markets.

The share of assets invested in equity, diversified and alternative investment products rose to 55% in 2004 from 54% in 2003. Assets in alternative investment products accounted for 13% of total assets under management at the end of 2004, compared with 12% in 2003.

Net banking income was up sharply by 18.8%* on 2003 (+15.0% in absolute terms).

BREAKDOWN OF ASSETS UNDER MANAGEMENT BY CLIENT SEGMENT AND GEOGRAPHICAL REGION

In billions of euros

BREAKDOWN OF ASSETS UNDER MANAGEMENT BY PRODUCT

In billions of euros

* When adjusted for changes in Group structure and at constant exchange rates.

(1) Source: Amadéis, February 2005.

The rise in operating expenses compared to 2003 (+13.9%*) remained well below that of revenue despite an increase in variable remuneration due to sharp growth in activity.

Annual operating income rose by 28.2%* on 2003 (+25.5% in absolute terms).

Private Banking

The business line continued its sustained sales drive with strong asset gathering over the period: EUR +4.9 billion over 2004 (representing growth in new money equivalent to 11% of assets under management).

Overall, assets under management stood at EUR 48.4 billion (1) at end-2004, versus EUR 45.1 billion at end-2003, despite a negative currency impact of EUR 1.3 billion. Structured products recorded strong growth in assets under management.

The business line recorded a sharp increase in net banking income over the year (+15.8%* over 2003, +23.5% in absolute terms). Despite the impact of additions to the sales teams and IT projects in Switzerland and Asia, operating expenses rose moderately in 2004 (+8.7%* compared to 2003, +14.5% in absolute terms).

Operating income recorded a strong increase (+30.1%*) on 2003 (+44.7% in absolute terms).

SG GSSI and Boursorama

Together with SG Asset Management and SG Private Banking, SG GSSI and Boursorama represent the third business line of Global Investment Management & Services.

Despite a relatively mixed market environment, client-driven activity continued to record sustained growth. The Brokerage division of SG GSSI confirmed its strong positioning (global market share of 5.1% in execution and clearing of listed derivative products in the fourth quarter). The number of funds administered by the Global Custodian division of SG GSSI rose by 13% over one year. Boursorama successfully implemented its strategy of diversification strategy into savings, particularly via UCITS.

Net banking income for the business line rose by 11.5%* on 2003 (+14.3% in absolute terms).

Operating expenses increased less than revenue (+6.5%* on 2003, +7.9% in absolute terms), despite non-recurrent expenses linked to rationalization.

Operating income doubled* compared to 2003 (+36.6% in absolute terms).

Corporate and Investment Banking: excellent

(1) Excluding assets of customers managed directly by the French Networks (approximately EUR 70 billion held by customers with investible assets exceeding EUR 150,000).

* When adjusted for changes in Group structure and at constant exchange rates.

Group management report

performance

In millions of euros	2004	2003	Change
Net banking income	4,697	4,734	–1%
Operating expenses	(2,887)	(2,913)	–1%
Gross operating income	1,810	1,821	–1%
Net allocation to provisions	60	(510)	NM
Operating income	1,870	1,311	+43%
Net income from long-term investments	16	27	–41%
Net income from companies accounted for by the equity method	28	17	+65%
Income tax	(449)	(295)	+52%
Net income before minority interests	1,465	1,060	+38%
Minority interests	(6)	(8)	–25%
Net income	1,459	1,052	+39%
Average allocated capital	3,523	3,498	+1%
ROE after tax	41.4%	30.1%

The contribution of the Corporate & Investment Banking arm to the Group's net income increased sharply over the year to EUR 1,459 million (+38.7% compared to 2003).

After-tax ROE for 2004 stood at 41.4% compared to 30.1% in 2003.

This performance was mainly achieved through the strategy of revenue growth and diversification. As part of this drive the Corporate & Investment Banking arm has implemented a plan based on several initiatives in high growth areas, involving a selective recruitment policy.

These results also reflect the strong performance of the Corporate & Investment Banking arm:

• worldwide: the performance of the equity derivatives business in 2004 was recognized by three major awards from The Banker, IFR and Risk Magazine; the business again won the Trade Finance magazine award for best global arranger in export finance and number one structured financing arranger worldwide in commodity finance;

• and in Europe: the division strengthened its leadership in its target businesses (No. 5 in the euro debt market and No. 1 in Spain, No. 3 project finance arranger in Europe), and in France where SG CIB ranks as the top player in debt and equity capital markets and No. 1 for equity research (Extel).

The division's operating expenses declined slightly compared to 2003: this reflects the full impact of cost-cutting plans completed in 2003 and cost control, while the division pursued targeted investment in line with its strategy.

The cost/income ratio came out at a low level of 61.5% in 2004, i.e. the same as 2003. Gross operating income rose by 2.1%* on 2003 (–1% in absolute terms).

In a very favourable credit risk environment, the Corporate & Investment Banking arm booked a net write-back of provisions of EUR 60 million for the year. Very few provisions were booked on new loans; a write-back was booked on specific provisions, either due to favorable developments in counterparties' financial positions, or because the loan was repaid or sold under the bank's policy of actively managing its loan book. No write-back was booked on general credit risk reserves in the United States and in Europe.

A tight rein was kept on market risks: average VaR remained at a moderate level of EUR 24.5 million over the year, vs. EUR 23.7 million in 2003.

Corporate Banking and Fixed Income

In millions of euros	2004	2003	Change
Net banking income	2,698	2,870	–6%
Operating expenses	(1,571)	(1,584)	–1%
Gross operating income	1,127	1,286	–12%
Net allocation to provisions	106	(473)	NM
Operating income	1,233	813	+52%
Net income from long-term investments	18	29	–38%
Net income from companies accounted for by the equity method	27	17	+59%
Income tax	(296)	(173)	+ 71%
Net income before minority interests	982	686	+43%
Minority interests	(6)	(8)	–25%
Net income	976	678	+44%
Average allocated capital	3,168	3,104	+2%
ROE after tax	30.8%	21.8%

In a more challenging market environment than in 2003, the Corporate Banking and Fixed Income business recorded a moderate 3.1%* decline in revenue compared to 2003 (–6% in absolute terms), which was a high base. Activity was strong in structured finance, debt capital markets and client-driven deals in fixed income. This partially offset the expected decline in revenue from treasury activities which nonetheless remained satisfactory.

Equity and Advisory

In millions of euros	2004	2003	Change
Net banking income	1,999	1,864	+7%
Operating expenses	(1,316)	(1,329)	–1%
Gross operating income	683	535	+28%
Net allocation to provisions	(46)	(37)	+24%
Operating income	637	498	+28%
Net income from long-term investments	(2)	(2)	NM
Net income from companies accounted for by the equity method	1	0	NM
Income tax	(153)	(122)	+25%
Net income	483	374	+29%
Average allocated capital	355	394	–10%
ROE after tax	136.1%	94.9%

* When adjusted for changes in Group structure and at constant exchange rates.

SOCIÉTÉ GÉNÉRALE GROUP - 2004 ANNUAL REPORT

The results of the Equity and Advisory arm were up sharply in 2004 (+8.8%* on 2003, +7.2% in absolute terms). The Equity Derivatives business recorded outstanding performance, up on 2003 both in client-driven and proprietary business. The Cash Equity and Advisory businesses were also satisfactory in the primary market and there was a pick-up in average secondary market volumes in 2004 despite the impact of the weakness in the convertible bond market in France and in Europe compared to 2003. Fourth quarter revenue includes the positive impact of the disposal of the Private Equity Europe portfolio.

Corporate Center

In millions of euros	2004	2003
Net banking income	(232)	(60) (1)
Operating expenses	(103)	(161)
Gross operating income	(335)	(221)
Net allocation to provisions	(4)	(56)
Operating income	(339)	(277)
Net income from long-term investments	68	374
Net income from companies accountedfor by the equity method	9	13
Exceptional items	(20)	(150)
Amortization of goodwill	(186)	(217)
Income tax	199	77
Net income before minority interests	(269)	(180)
Minority interests	(72)	(47)
Net income	(341)	(227)

The Corporate Center made a negative contribution of EUR 341 million in 2004, after recognizing a goodwill amortization charge of EUR 186 million.

The policy of reducing the industrial equity portfolio was continued in 2004. At December 31, 2004, the net book value of the portfolio stood at EUR 1.6 billion (vs. EUR 2.6 billion at December 31, 2003), representing an unrealized capital gain of EUR 0.3 billion.

Financial policy

The objective of the Group's capital management policy is to optimize the use of capital to maximize the short- and long-term return for the shareholder, while maintaining a capital adequacy ratio (Tier-one ratio) in keeping with the share's stock market status and the target rating needed for the Group's capital market activities.

The Tier-one ratio stood at 8.5% at December 31, 2004 and reflected the respective changes in available funds and funds used over the period.

■ Available funds:

• Net income of EUR 3.1 billion;

• Additional paid-in capital from capital increases reserved for employees in the amount of EUR 0.4 billion;

• Various items, including the amortization of goodwill and changes in reserves in the amount of EUR 0.4 billion, excluding the impact of fluctuations in the US dollar.

■ Funds used:

• Financing of organic growth: EUR 1.3 billion in 2004 at constant exchange rates, reflecting growth in the Group's businesses across the board;

• Financing of acquisitions: EUR 0.5 billion in 2004;

• The dividend paid in 2004, up 32% on 2003 (payout ratio of 43% in 2004);

• Share buybacks intended to offset the dilutive impact of capital increases reserved for employees, corresponding to 10.4 million shares in 2004 (EUR 0.7 billion).

(1) NBI for 2003 included an exceptional capital gain of EUR 187 million on the disposal of property.

* When adjusted for changes in Group structure and at constant exchange rates.

Recent developments and future prospects

In line with the past few years, the Group will continue to focus on four strategies over 2005: maintenance of a balanced risk exposure and business mix, expansion of its European franchise, search for longterm growth and improvement of its operating efficiency.

With a satisfactory growth outlook in all its core businesses, the Group should be able to maintain its combination of high profitability and a diversified and balanced risk profile:

The French Networks should assert their solid positions while at the same time continuing to open new branches and profiting from the multi-channel banking platform implemented in the Société Générale Network and the success of the local regional banking model adopted by Crédit du Nord.

The Corporate & Investment Banking arm will capitalize on its leadership positions in derivatives (equity, commodities, forex and interest rates), structured finance and euro capital markets to continue to grow in key European countries and retain its reputation as one of the most innovative players in the market. To achieve this goal, it has implemented a number of targeted initiatives (Turbo Growth Venture 2008) which illustrate its dynamism.

The Group's growth drivers, Financial Services, Retail Banking outside France and GIMS, will continue to make a substantial contribution to its earnings growth, thanks to an ongoing focus on organic expansion and the implementation of operational synergies (harmonization of IT systems in the foreign retail banking subsidiaries, coordination of the financial services offering, cross-selling between the various plaforms and asset management entities, etc.).

In parallel to these organic initiatives, the Group will continue to examine opportunities for acquisitions or partnerships that offer potential, but will play close attention to criteria such as risk, profitability and potential for integration.

At the same time, the Group will continue to improve its operating efficiency through the ongoing rationalization of its platforms and processes, both in the front and back offices, and in the core businesses and corporate departments.

Post-closing events

Acquisition of 75% of Hanseatic Bank

Société Générale has acquired 75% of the capital of Hanseatic Bank, a subsidiary of the Otto Group, for a total of EUR 190 million.

Hanseatic Bank will be consolidated in the Société Générale Group's accounts at the start of 2005.

The transaction is part of the Group's long-term strategy of development in Financial Services: it will give Société Générale a leadership position in consumer credit in Germany with total outstanding loans of some EUR 2.6 billion.

Disposal of the Argentine subsidiary Banco Société Générale Argentine (BSGA)

In November 2004, Société Générale Group announced it was to sell BSGA to the Argentine banking group, Banco Banex S.A. The transaction is subject to the usual regulatory approval, but should be finalized in the first quarter of 2005.

Group management report

Analysis of consolidated balance sheet

In billions of euros at December 31	2004	2003	Change
ASSETS
Interbank and money market assets	26.1	26.0	+0.1%
Customer loans	198.9	177.1	+12.3%
Securities (1)	245.4	226.0	+8.6%
of which: securities purchased under resale agreements	76.8	75.4	+2.0%
Net investments of insurance companies	49.0	42.9	+14.2%
Other assetsof which: option premiums	70.532.6	56.621.4	+24.5%+52.3%
Long-term assets	11.2	10.8	+3.7%
Total assets	601.1	539.4	+11.4%
LIABILITIES & SHAREHOLDERS' EQUITY
Interbank and money market liabilities (2)	162.9	147.1	+10.7%
Customer deposits	174.5	160.2	+8.9%
Bonds and subordinated debt (3)	18.5	17.3	+6.9%
Securitiesof which: Securities sold under repurchase agreements	98.561.1	92.951.7	+6.0%+18.1%
Other liabilities and provisionsof which: option premiums	76.934.9	59.423.7	+29.5%+47.3%
Underwrinting reserves of insurance companies	46.8	41.2	+13.6%
Equity and general reserve for banking risksGeneral reserve for banking risks	23.00.3	21.30.3	+8.0%–
Minority interests	2.1	2.0	+5.0%
Preferred shares	2.0	2.1	–4.8%
Shareholders' equity	18.6	16.9	+10.1%
Total liabilities & shareholders' equity	601.1	539.4	+11.4%

(1) Including securities purchased under resale agreements previously booked under interbank assets.

(2) Including negotiable debt instruments previously booked under "Securitized debt payables".

(3) Including undated subordinated capital notes.

At December 31, 2004, the consolidated balance sheet stood at EUR 601.1 billion, up 11.4% versus December 31, 2003. The decline in the dollar led to a reduction of EUR 9.2 billion (–1.7% of total balance sheet).

The acquisition of a 50.01% stake in General Bank of Greece and of Elcon represented the main changes in structure between December 31, 2003 and December 31, 2004. These acquisitions added EUR +4.2 billion to the Group consolidated balance sheet.

The main changes in the consolidated balance sheet are as follows:

Customer loans stood at EUR 198.9 billion at December 31, 2004, up 12.3% versus December 31, 2003 and up 9.5% when adjusted for changes in Group structure reflecting:

• higher lending to individual customers, driven by mortgage loans (+13.2%);

• growth in short-term credit facilities (+19.2%), both to business customers (+18.2%) and individual customers (+8.1%).

Outstanding customer deposits stood at EUR 174.5 billion at December 31, 2004, up 8.9% versus December 31, 2003 and 7.5% when adjusted for changes in Group structure. This reflects growth in individual customer deposits and special savings account deposits aimed at individual customers, together with other deposits by financial customers.

The securities portfolio stood at EUR 245.4 billion at December 31, 2004, up 8.6% compared to December 31, 2003, with a negative impact of EUR 6.2 billion due to the decline in the dollar. This reflects the increase in the portfolio of negotiable securities (+34.3%) and the bond portfolio (+10.3%).

Other asset and liability items on the balance sheet recorded a sharp increase between December 31, 2003 and December 31, 2004. This was mainly due to the increase in premiums on option purchases (+52.3%) and sales (+47.3%).

Group shareholders' equity stood at EUR 18.6 billion at December 31, 2004 versus EUR 16.9 billion at December 31, 2003, mainly reflecting the following:

• 2004 net income: EUR +3.1 billion;
• capital increase reserved for employees: EUR +0.4 billion;
• 2003 dividend payment: EUR –1.0 billion;
• variation in treasury stock: EUR –0.7 billion.

After recognizing the general reserve for banking risks (EUR 284 million at December 31, 2004, versus EUR 312 million at December 31, 2003), minority interests (EUR 2.1 billion) and preferred shares (EUR 2.0 billion), total shareholders' equity amounted to EUR 23 billion at December 31, 2004.

This represented a BIS ratio of 11.86% at December 31, 2004. The Tier-one ratio stood at 8.54% of risk-weighted assets (EUR 215 billion), reflecting the financial strength of the Group.

Group debt policy

The debt policy of the SG Group reflects its refinancing requirements, in accordance with two main objectives. The Société Générale Group actively seeks to diversify refinancing in order to ensure stability: at December 31, 2004, customer deposits and life insurance deposits accounted for EUR 221.3 billion in Group refinancing (i.e. 36.8% of Group liabilities), while interbank deposits and funds generated through the refinancing of securities portfolios stood at EUR 261.4 billion (i.e. 43.5% of Group liabilities). The balance of refinancing requirements was comprised of shareholders' equity, bonds and subordinated debt together with other financial accounts and provisions. Furthermore the maturity and currency profile of the Group's refinancing enabled it to control its mismatch policy and reduce exposure to currency risk.

Changeover to IAS (International Accounting Standards)

Main differences identified between the accounting standards currently applied by the Société Générale Group and the IFRS (International and Financial Reporting Standards) adopted by the European Accounting Regulation Committee (ARC).

All the accounting standards applied by the Group, in accordance with Regulations 1999-07 and 2000-04 of the Accounting Regulation Committee are described in detail in Note 1 of the notes to the consolidated financial statements.

These principles differ in some aspects from those that must be applied by all listed companies as of January 1, 2005, in accordance with the European regulation published by the European Commission on July 19, 2002. Europe has opted for IFRS as the European financial reporting framework, subject to the said standards being validated by the European Accounting Regulation Committee.

Consequently the differences identified at this stage do not take into account the standards which have not been adopted by the ARC, nor those standards still in the form of exposure drafts that will be published by the IASB (International Accounting Standards Board).

The main differences identified to date between the IFRS approved by the ARC and the accounting principles applied in preparing the Société Générale Group's 2004 consolidated financial statements are set out in a separate section of the Annual Report:

• Notes 1 and 2 describe the accounting options used to establish the 2004 financial statements under IFRS applicable in 2004.

• A specific Note on the IAS applicable in 2005, with details of the main differences regarding the treatment of financial instruments and transactions related to the insurance business.

Organization of the project for the changeover to IFRS within the Société Générale Group

At the start of 2002, the Société Générale Group began a preliminary analysis of the impact of the changeover to IFRS in Europe. Following the publication in July 2002 of the European regulations confirming the implementation timetable, the Group set about creating the necessary project structures. A Group-level program was put in place at the beginning of 2003 to coordinate the various projects and ensure monitoring at General Management level. A steering committee meets once a quarter to this end. The programme manager reports to the Chief Financial Officer.

The program is responsible for analysing IAS, interpreting the standards, and translating them into accounting principles for the Société Générale Group. It handles the functional coordination (verification of compliance with the Group's IFRS) of system and process upgrades, and checks the quality of the information produced during testing and the certification process. A change management project was launched to coordinate training, communication initiatives and changes in working practices.

The program comprises a set of projects, each with a project management team and dedicated resources. Projects have been set up within each business and for each of the corporate departments concerned.

Progress of groundwork for adopting new standards

At the end of 2003, the majority of IFRS applicable in 2005 have been covered by a preliminary analysis and impact study. The most significant system impacts have been covered by specifications, and were developed and implemented in 2004. The upgrades covered operating systems (calculation of data required for accounting under new standards), as well as the entities' accounting systems and the Group's financial consolidation and reporting systems: the reporting system is now based on a new set of accounting principles incorporating all the IFRS (including IAS 32 and 39).

In 2004 the quarterly financial statements were produced under the criteria validated by the European Regulation Accounting Committee, for which the IASB requires comparative financial statements. These financial statements are included in the IAS brochure in a note to the Annual Report.

Training sessions on IFRS were launched in 2003 and continued in 2004, including operational sessions and additional training covering IAS 32 and 39.

Operating processes were tested on a live basis, in order to verify the proper functioning of the information systems, and ensure that the teams are fully prepared.

The Group will now be able to produce 2005 consolidated financial statements based on the IFRS ratified in Europe.

A specific presentation dedicated to IAS was held on September 27, 2004, in accordance with the recommendations of the CESR (Committee of European Securities Regulators) and the Autorité des Marchés Financiers (French Securities Regulator), which recommend regular communication on the changes arising from the changeover to IAS standards.

Risk management

The mains risks incurred on banking activities are the following:

• credit risks (including country risk): risk of loss arising from the inability of the bank's customers, sovereign issuers or other counterparties to meet their financial commitments.

• market risks: risk of loss resulting from changes in market prices and interest rates, in correlations between these elements and their volatility.

• structural risks: risk of loss arising from an inability to refinance the bank's balance sheet at reasonable interest rates for the appropriate maturities.

• operational risks (including legal and environmental risks, among others): risk of loss resulting from unsuitable or failed procedures, persons or internal systems, or caused by external events.

Société Générale permanently invests in significant means to continue improving its risk management framework so as to reflect the diversification of its activities. These changes were implemented in compliance with two fundamental principles of banking risk management, as stipulated in regulations 1997-02, 2001-01 and 2004-02 of the French Banking and Financial Regulation Committee (Comité de la réglementation bancaire et financière):

• risk assessment departments are independent of operating divisions,

• a consistent approach to risk assessment and monitoring is applied at the Group level.

The Risk Division, which reports directly to the bank's General Management, aims to underpin the Group's development and profitability by ensuring that the risk management framework is solid and effective. The Risk Division also includes risk modeling teams, information system project managers, industry experts and economic research teams, and is responsible for:

• defining and validating the methods used to analyze, assess, approve and monitor credit risks, country risks, market risks and operational risks;

• helping to draw up sales strategies for high-risk areas and permanently seeking to improve the forecasting and management of all such risks;

• contributing to the independent assessment of credit risks by commenting on transactions proposed by sales managers;

• identifying all Group risks and monitoring the adequacy and consistency of risk information systems.

A systematic review of the main issues concerning the bank's risk management is carried out during monthly Risk Committee meetings, which bring together members of the Executive Committee and managers from the Risk Division.

This Committee considers the main strategic stakes wherever necessary: risk taking policies, measuring methods, material and human resources, analyses of portfolios and the cost of risk, market limits and credit concentration limits (by product, country, sector, region, etc.), crisis management.

Each department (commercial banking or business line) is responsible for submitting all new products and activities, or products under development to the New Product Committee of the relevant division. This New Product Committee aims to ensure that, prior to the launch of a new activity or product, all associated risks are fully understood, measured, approved and subjected to adequate procedures and controls, using the appropriate information systems and processing chains.

Credit risks

Risk approval

Approval of a credit risk must be based on sound knowledge of the customer, the Group's risk strategy, the purpose, nature and structure of the transaction and the sources of repayment. It assumes that the return on the transaction will sufficiently reflect the risk of loss in the event of default.

The risk approval process is based on four core principles:

• all transactions giving rise to a counterparty risk (debtor risk, nonsettlement or non-delivery risk, issuer risk) must be authorized in advance;

• all requests for authorizations relating to a specific customer or customer group must be handled centrally by a single operating division. The centralizing division is designated on a case-by-case basis in order to ensure a consistent approach to risk management and permanent control of the Group's potential exposure to major clients;

• responsibility for analyzing and approving risk is delegated to the most appropriate section of the business lines or credit risk units;

• risk assessment departments are fully independent at each decision-making level.

Risk management

The Risk Division has a specialized department for financial institutions, which aims to increase the Group's expertise on this client segment by centralizing, in Paris and New York, the departments in charge of analyzing the quality of the Group's counterparties and approving the exposure limits allocated to all locations and business lines.

The Risk Committee regularly carries out a cross-business line assessment of existing or potential concentrations within the Group portfolio and the key features of these concentrations. The management of the Group's concentration risks is based on a series of procedures that include a system for analyzing exposure by risk category, as well as stress-test models and correlation studies.

The Risk Division recommends the concentration limits that it deems are needed, at any given moment, to reduce cross-business line risks with strong correlations, to the Risk Committee, broken down by country, geographic area, sector, product and type of customer, etc.

The definition of country risk limits is intended to assign an appropriate exposure limit to each emerging market, on the basis of the risk incurred and the expected return on transactions in each country. The allocation of limits is subject to final approval by Group General Management and is based on a process that takes due account of those business lines exposed to risk and the Risk Division.

The Group also has specific procedures to manage any credit crises that could arise with respect to a counterparty, industry, country or region.

Risk management and audit

All Group operating units, including trading rooms, are equipped with information systems enabling them to check, on a daily basis, that the exposure limits set for each counterparty have not been exceeded.

In addition to this day-to-day management of risks, a second level of control is performed by the head office operating divisions, using the Group-wide risk information system developed by Société Générale in recent years. This system is used to centralize in a single database almost all the commitments borne by all operating divisions, to consolidate exposure by counterparty and to reconcile this exposure with the corresponding authorizations. It is also used to provide source data for the portfolio analyses (by country, industry, type of counterparty, etc.), which are fundamental to an active risk management strategy.

Changes in the quality of outstanding commitments are reviewed at regular intervals, at least once a quarter, so as to assess the classification of "watch names", as well as to determine the level of provisioning required. These reviews are based on concurrent analyses performed by the operating divisions and the Risk Division. Furthermore, the Risk Division also carries out file reviews or risk audits at the level of all the Group's operating divisions. In addition, the Group's Internal Auditors also perform regular risk audits and report their findings to Group General Management.

The Audit Committee attached to the Group's Board of Directors is periodically informed of major changes in risk management methods and procedures, as well as in provisioning requirements. It examines the risk audit, which is drawn up under amended article 43 of regulation 1997-02 of the French Banking and Financial Regulation Committee, before the said audit is submitted to the Board of Directors.

Risk measurement

After carrying out an assessment of counterparty risks arising from capital market activities at the end of the 1980's, Société Générale launched a major project in the second half of the 1990's to quantify all its credit risks using a "RAROC" (Risk Adjusted Return On Capital) approach. One of the principal aims is to estimate expected losses on credit transactions during the business cycle, on the basis of quantitative methods.

Internal ratings

To this end, the Group has adopted an internal ratings scale similar to that used by external rating agencies. It includes 22 levels of risk, three of which concern high-risk/defaulting counterparties (outstanding loans classified as doubtful or non-performing).

The Group's rating scale comprises a series of methods and tools, each adapted to the specific nature of each client (size, nationality, industry, etc.) and the characteristics of each transaction (maturity, guaranties, type of transaction). It enables the bank to estimate the average loss and capital requirement per client and per transaction. The Group's rating models have been constructed jointly by banking experts (commercial and risk departments) and modeling teams. The methodologies used are updated on a regular basis.

Risk ratings are determined at the start of a relationship or a transaction, then regularly reviewed and/or modified whenever considered necessary in view of a particular event.

The rating enables the bank to analyze the degree of risk entailed in each credit transaction, determine the appropriate level of delegation and analyze the overall characteristics of the portfolio.

It forms the basis for the RAROC analysis (credit pricing, return on the transaction and the relationship, allocation of capital).

The tools used for rating and measuring risk and risk-adjusted performance are now widely implemented across the Group.

They are regularly used by customer relationship managers and risk managers to determine the various risk factors, set exposure limits and calculate the risk-adjusted return.

The rating approach is thus an integral part of all decision-making processes and of credit risk management.

For the Group's portfolio, a methodology has been developed which takes into account the correlation between geographical regions, industrial sectors and counterparty credit ratings, in order to estimate potential losses on the basis of a pre-defined confidence interval. These techniques enable the Group to assess extraordinary losses in the event of a significant deterioration in economic conditions.

At the Group level, these tools are currently used for analyzing client profitability and for active portfolio management.

They are used by the Finance and Corporate Planning Department for capital allocation purposes.

All existing tools are currently being adapted to meet the requirements of the future Basel II regulations and will be used to calculate the Group's new capital adequacy ratio.

Credit portfolio analysis

Outstanding on individual and business customers

At December 31, 2004, on- and off-balance sheet loans gross of provisions granted by the Société Générale Group to its non-banking clients totaled EUR 304 billion (including EUR 205 billion of outstanding balance sheet loans). The Group's commitments on its ten largest industrial counterparties account for 6% of this portfolio.

BREAKDOWN OF SOCIÉTÉ GÉNÉRALE GROUP COMMERCIAL OUTSTANDING BY INDUSTRY AT DECEMBER 31, 2004

(excl. individuals)

Telecom operators	4%	Construction	3%
Public administration		Paper, printing & publishing	2%
& Education	7%	Textile manufacturing	1%
Healthcare & social services	2%	Wholesale trade	7%
Machinery & equipment	4%	Retail trade	6%
Electricity, gas & water	4%	Hotels & catering	2%
Transport equipment		Finance & insurance	15%
manufacturing	5%	Business services	6%
Food & agriculture	4%	Real estate	8%
Chemicals		Membership organizations
& pharmaceuticals	4%	& recreation services	3%
Metals & minerals	3%	Transportation	5%
Oil & gas extraction	3%	Other	2%

Total on- and off-balance sheet commitments: EUR 241 billion

The Group's loan portfolio is highly diversified in terms of sectors, and generally matches the structure of world GDP. Only one sector accounts for more than 10% of total Group outstanding (finance & insurance excluding banks), and is characterized by a moderate cost of risk.

Risk management

BREAKDOWN OF SOCIÉTÉ GÉNÉRALE GROUP LOANS TO NON-BANKING CUSTOMERS BY GEOGRAPHICAL REGION AT DEC. 31, 2004

(including individuals)

■ Balance sheet commitments: EUR 205 billion

■ On- and off-balance sheet commitments: EUR 304 billion

At December 31, 2004, 89% of the Société Générale Group's on- and off-balance sheet outstanding was concentrated on the major industrialized countries. Over 50% of loans are to French customers (39% to corporates and 17% to individual customers).

Commitments on banking counterparties

Authorizations relating to banking and similar counterparties are defined using an internal method for evaluating financial institutions and a table of maximum limits (broken down by credit rating and maturity) approved by the General Management.

At December 31, 2004, balance sheet banking commitments (excluding securities purchased under resale agreements) and offbalance sheet commitments amounted to EUR 27 billion (excluding delivery and replacement risk).

S&P equivalent of internal rating

* Borrower risk (including issuer risk) and replacement risk, excluding doubtful loans.

The large majority of these risks (91%) relates to banks rated "Investment Grade" by the rating agencies. Exposure on non-Investment Grade banks essentially concerns reserves with central banks in countries where Société Générale has retail banking activities. For the remainder, the exposure is highly diversified and exclusively shortterm. Consequently, Société Générale's cost of risk on its banking counterparties remains structurally very low.

Outstanding on emerging markets

The Group's outstanding on business and individual customers in emerging markets is subject to limits validated on an annual basis by the General Management. Excluding countries that joined the EU on May 1, 2004, these commitments now account for less than 7% of Société Générale's loan portfolio.

At December 31, 2004, nearly 60% (EUR 7.4 billion) of the outstanding loans not covered by guarantees concerned Retail Banking (which has good risk diversification), with the remainder relating to Corporate and Investment Banking.

■ Retail Banking

In Retail Banking, the net outstanding on emerging markets (excluding countries that have joined the EU) stood at EUR 7.4 billion at December 31, 2004, compared with EUR 6.3 billion at year-end 2003. This amount includes off balance-sheet commitments and takes into account the integration in 2004 of Société Générale Yugoslav Bank A.D. (impact: EUR 0.2 billion). Furthermore, commitments in the amount of EUR 1.1 billion are covered by specific provisions. This portfolio covers 15 countries in four geographical regions (Eastern Europe, the Mediterranean basin, French-speaking Africa and Latin America). The majority of the corresponding commitments are denominated in the local currency and refinanced locally.

CHANGE IN NON-BANKING EXPOSURE ON EMERGING MARKETS*

(including recent acquisitions) - Retail Banking

In billions of euros	Dec. 31, 2003	Dec. 31, 2004
Individual customers	1.7	2.1
Business customers	4.6	5.3
Total	6.3	7.4

* On- and off-balance sheet, net of specific provisions for identified risks.

Furthermore, commitments to countries which joined the European Union on May 1, 2004 (not included above) stood at EUR 9.4 billion at year-end 2004, compared with EUR 8.1 billion in 2003.

■ Corporate and Investment Banking

In Corporate and Investment Banking, the residual part of the Group's outstanding, not covered by specific provisions or guarantees (ECA, cash collateral), stood at EUR 5.3 billion on December 31, 2004 (nearly half of which are in Investment Grade countries), excluding countries that joined the EU on May 1, 2004, representing an increase on December 31, 2003 (EUR 4.8 billion).

CHANGE IN NON-BANKING EXPOSURE ON EMERGING MARKETS*

Corporate and Investment Banking

In billions of euros	Dec. 31, 2003	Dec. 31, 2004
Mitigated country risk**	2.2	2.1
Standard country risk	2.6	3.2
Total	4.8	5.3

* On- and off-balance sheet, net of specific provisions for identified risks and guarantees (ECA, cash collateral).

** Transactions where the structure reduces the country risk, without eliminating it (export prefinancing with offshore payment, political risk insurance, participation in financing extended by International Financial Institutions).

Furthermore, outstanding covered by specific provisions amounted to EUR 0.3 billion.

Commitments net of provisions to countries which joined the EU on May 1, 2004, not included above, totaled EUR 0.3 billion at December 31, 2004 and EUR 0.4 billion at year-end 2003.

Risk management

Credit risk coverage and provisions

Management of the loan portfolio

■ Organization

In the Corporate and Investment Banking division, the bank's loan portfolio is managed by a specific department, set up five years ago, which works in conjunction with the Risk Division and business lines to reduce excess concentrations and respond quickly to any deterioration in a counterparty's credit quality liable to affect the portfolio. Concentrations are measured using an internal model and individual concentration limits are defined for the largest exposures. Exceeded concentration limits are managed by reducing exposure, hedging positions in the secondary market and/or selling assets.

■ Use of credit derivatives

The Group uses credit derivatives in the management of its loan portfolio. They are primarily used to manage the concentration of our outstanding corporate loans. This reduces exposure to certain counterparties. The notional amount for credit derivatives purchased for the purpose of managing concentrations in the corporate portfolio is booked under "guarantee commitments received" in off-balance sheet items. The Group's current positions in credit derivatives are almost exclusively hedging positions. The nominal amount of Credit Default Swaps (CDS) acquired at end-December 2004 was EUR 6.5 billion, with an average residual maturity of 2.9 years (hedging positions).

Provisioning for credit risks at December 31, 2004

The net allocation to provisions for Société Générale Group commercial risk (excluding disputes) in 2004 amounted to EUR 421 million, compared with EUR 1,106 million at December 31, 2003, representing a reduction of 62%.

CHANGE IN GROUP PROVISIONING

IN 2004 (excluding legal disputes)

The Group's cost of risk (excluding disputes) in 2004 therefore fell to 20 basis points, compared with 59 basis points in 2003.

This fall is primarily due to the reduction in specific provisioning for identified risks in Corporate Banking. Very few new loans were provisioned, and specific provisions were written back following the repayment or sale of certain loans.

There was no significant change in the general reserve for banking risks in 2004.

■ Provisioning for credit risks

Provisioning for credit risks principally covers doubtful and disputed loans. These loans totaled EUR 10.3 billion at December 31, 2004.

These loans are covered by specific provisions amounting to EUR 7 billion at December 31, 2004.

Taking into account specific provisions for identified risks, the general reserve for banking risks and country and sector risk reserves (totaling EUR 8.0 billion), the coverage ratio for the Group's doubtful and disputed loans is 77%.

BREAKDOWN OF DOUBTFUL AND DISPUTED LOANS BY GEOGRAPHICAL REGION AT DECEMBER 31, 2004

Total doubtful and disputed loans: EUR 10.3 billion

BREAKDOWN OF SPECIFIC PROVISIONS BY GEOGRAPHICAL REGION AT DECEMBER 31, 2004

Total specific provisions: EUR 7.0 billion

■ General provisions for sector and country risk

Total general provisions for sector risk (excluding country risk) amounted to EUR 572 million at December 31, 2004, against a total stock of EUR 558 million at end-2003.

Over and above the usual provisions covering credit risks, the bank books a general "country risk" reserve, intended to cover its risk exposure on emerging markets. At December 31, 2004, this provision totaled EUR 432 million.

Hedge funds

Hedge funds have registered particularly strong growth in assets under management over the past two years, becoming major players in the financial markets and therefore an increasingly important client segment for our business lines. The Group also sells structured products based on hedge funds to its investor client base.

Hedge funds generate specific risks due to the lack of regulation governing their activities and the strong correlation between credit and market risk. As a result, Société Générale has adopted a specific risk management system based on the following:

• Stress tests to measure market risk and the risk associated with financing transactions guaranteed with shares in hedge funds*.*

• Due diligence procedures and monitoring of hedge fund performances by teams within the business lines. These teams are in close contact with the hedge funds, but operate according to the procedures and methods validated by the Risk Division.

• Centralization of all risk exposure on hedge funds with the Risk Division, which monitors counterparty and market risk on a daily basis.

All activities with hedge funds, throughout the Group, are governed by two global limits set by the Chairman:

• A credit VaR limit which controls replacement risk.

• A stress test limit governing market risk and risks related to financing transactions guaranteed by shares in hedge funds.

Market risks

Organization

The organization of market risk management has been continually adjusted with a view to harmonizing existing procedures within the Group and guaranteeing that risk management teams remain independent from the operating divisions.

Although the front-office managers are responsible in the first instance for risk management, the ultimate responsibility lies with an independent structure: the Market Risk unit of the Risk Division. This unit is responsible for:

• daily analysis (independently from the front office) of the exposure and risks incurred by all the Group's market activities and comparison of this exposure and risk with the limits set;

• defining the methods for assessing and managing risk, approving the valuation methods used to calculate risks and results and establishing provisions for market risk (reserves and adjustments to earnings);

• developing the databases and systems used to assess market risks; • preparing the limit applications based on the requests of the operating divisions, within the global limits set by General Management,

and monitoring their use; • centralizing, consolidating and reporting the Group's market risks.

On the proposal of this department, the Group's Risk Committee sets the levels of authorized risk by type of activity and takes the main decisions concerning Group risk management. Within each entity that incurs market risk, risk managers are designated to implement the first level of risk control. The main tasks of these managers, who are independent of the front offices, include:

• constant analysis of exposure and results, in collaboration with front offices;

• daily verification of the market parameters used to calculate risks and results;

• daily calculation of market risks, based on a formal and secure procedure;

• daily limit monitoring for each activity, and ongoing verification of the adequacy of the limits set for each activity.

In the case of the major trading rooms in France and abroad, these specialized market risk managers report directly to the Risk Division.

Methods of measuring market risk and defining exposure limits

Société Générale's market risk assessment is based on three main indicators, which are used to define exposure limits:

• the 99% "Value at Risk" (VaR) method, in accordance with the regulatory model, a composite indicator for day-to-day monitoring of the market risks incurred by the bank, in particular in its trading activities; • a stress-test measurement, based on a decennial shock type indi-

cator. Stress-test measurements limit the Group's exposure to systemic risk and exceptional market shocks;

• complementary limits (sensitivity, nominal, influence or holding period, etc.), which ensure coherency between the total risk limits and the operational limits used by the front office. These limits also enable risks only partially detected by VaR or stress-test measurements to be controlled.

The 99% Value at Risk (VaR) Method

This method was introduced at the end of 1996. It is constantly being improved with the addition of new risk factors and the extension of the scope covered by the VaR. Almost all the Group's market risks are monitored using the VaR method, in particular those relating to more complex activities and products. Only a few entities have not been included within the VaR process, and the market risks incurred by these entities are residual.

Interest rate or currency risks incurred on retail or commercial banking activities are included within the VaR scope when these risks are transferred to departments responsible for capital market activities.

The method used is the "historical simulation" method, which implicitly takes into account the correlation between all markets and abnormal distributions of variations in market parameters. It is based on the following principles:

• the creation of a database containing risk factors which are representative of Société Générale's positions (i.e. interest rates, share prices, exchange rates, commodity prices, volatility, credit spreads, etc.). The VaR is calculated using a database of nearly 10,000 risk factors;

EVOLUTION OF THE VaR IN TRADING ACTIVITIES (TRADING PORTFOLIOS) DURING 2004 (1 DAY, 99%)

In millions of euros

• the definition of 250 scenarios, corresponding to one-day variations in these market parameters over a sliding one year period;

• the application of these 250 scenarios to the daily market parameters;

• the revaluation of daily positions, on the basis of the adjusted daily market conditions and on the basis of a revaluation taking into account the non-linearity of these positions.

The 99% Value at Risk is the largest loss that would be incurred after eliminating the top 1% of most unfavorable occurrences. Over one year, or 250 scenarios, it corresponds to the average of the second and third largest losses observed.

The VaR is first and foremost designed to monitor market activity in the Bank's trading portfolios. In 2004, the VaR limit for all trading activities was set at EUR 60 million.

The value at risk in the Group's trading activities, across the full scope of activities monitored, evolved as follows in 2004:

SOCIÉTÉ GÉNÉRALE GROUP - 2004 ANNUAL REPORT

BREAKDOWN OF TRADING VaR BY TYPE OF RISK CHANGE BETWEEN 2003 AND 2004

In millions of euros		Year-end		Average		Minimum		Maximum
1-day, 99%	2004	2003	2004	2003	2004	2003	2004	2003
Interest rate risk	– 22	– 23	– 30	– 22	– 19	– 17	– 38	– 30
Equity price risk	– 14	– 15	– 12	– 14	– 6	– 8	– 21	– 24
Exchange rate risk	– 1	– 1	– 1	– 1	0	– 1	– 3	– 3
Commodity price risk	– 2	– 3	– 2	– 3	– 1	– 2	– 4	– 5
Compensation effect	16	18	21	17	NM*	NM*	NM*	NM*
Total	–22	–24	–25	–24	–18	–17	–34	–34

(*) Compensation not significant since the potential minimum and maximum losses do not occur on the same date.

BREAKDOWN OF TRADING VaR BY TYPE OF RISK

The average VaR remained stable at EUR 25 million compared with EUR 24 million in 2003. The increase in exposure to interest rates, from EUR 22 million to EUR 30 million, was largely offset by a slight reduction in equity price risk and an increase in the compensation effect between the various risks (from EUR 17 million to EUR 21 million) reflecting the bank's high degree of risk diversification.

Methodological limits to VaR assessment

The VaR assessment is based on a model and conventional hypotheses that have their limits. The main shortcomings of the model are:

• the use of "1 day" shocks assumes that all positions can be unwound or hedged within one day, which is not always the case for some products and in some crisis situations;

• the use of the 99% confidence interval does not take into account any losses arising beyond this interval; the VaR is therefore an indicator of losses under normal market conditions and does not take into account exceptionally large fluctuations;

• VaR is calculated using closing prices, so intra-day fluctuations are not taken into account.

The Group manages this methodological risk by:

• systematically assessing the relevance of the model by back-testing to verify that the number of days for which the negative result exceeds the VaR complies with the 99% confidence interval, which has been the case since the VaR system was introduced. This back-testing is carried out on each of the perimeters for which a VaR is calculated, enabling the process to be validated at both a global and sub-activity level. The chart below represents the back-testing of the VaR on the regulatory perimeters. The daily total never exceeded the amount of the VaR in 2004. Statistically, the confidence interval would still be valid if the VaR is exceeded two or three times a year;

• complementing the VaR system with stress-test measurements.

The Stress Test model

Alongside the internal VaR model, Société Générale monitors its exposure using the "stress test" method so as to take exceptional market occurrences into account.

The stress test risk assessment methodology was greatly improved in 2004 with the introduction, at the end of January, of 18 historical scenarios and 7 hypothetical scenarios to supplement the existing Société Générale hypothetical scenario used since the start of the 1990's. The stress test is one of the main pillars of our risk management system, alongside the VaR model, and is based on the following principles:

• risks are calculated every day for each of the bank's market activities (all products), using the 18 historical scenarios and 8 hypothetical scenarios;

• stress-test limits are established for the Group's activity as a whole and then for the different business lines, based on the maximum potential losses identified using the 25 historical and hypothetical scenarios, and the Société Générale hypothetical scenario;

• the different stress-test scenarios are reviewed and expanded by the Risk Division on a regular basis, in conjunction with the Group's teams of economists and specialsts.

VaR BACK-TESTING USING THE REGULATORY SCOPE DURING 2004 (1 DAY, 99%) In millions of euros

SOCIÉTÉ GÉNÉRALE GROUP - 2004 ANNUAL REPORT

Risk management

Historical stress tests

This method consists in an analysis of the major economic crises that have affected the financial markets over the past 20 years.

The changes in the prices of financial assets (equities, interest rates, exchange rates, credit spreads, etc.) during each of these crises are analyzed in order to define scenarios for potential variations in these risk factors which, when applied to the bank's trading positions, could generate significant losses. Using this methodology, Société Générale has established 18 historical scenarios.

Hypothetical stress tests

The hypothetical scenarios are defined by the bank's economists and aim to identify possible sequences of events that could lead to a major crisis in the financial markets (e.g. major terrorist attack, political instability in the main oil-producing countries, etc.). The bank aims to select extreme, but nonetheless plausible, events which would have major repercussions on all international markets. Société Générale has adopted 8 hypothetical scenarios.

Results at December 31, 2004

Société Générale applied each of these scenarios to its trading positions at December 31, 2004 and obtained the results indicated in the chart below.

The highest potential loss obtained (around EUR 600 million) corresponds to very severe or extreme shocks to the prices of all asset classes held by the bank (e.g. fall of between 15 and 30% in all global stock market indexes, etc.). Moreover, the probability of such a stress scenario, which involves simultaneous shocks to the prices of all financial assets over a period of a few days, is very low and can be estimated at once every 40 years.

Structural risks

The application of regulations 97-02 and 2001-01 of the CRBF (French Banking and Financial Regulation Committee) on internal control provided Société Générale with the opportunity to define the principles for monitoring the Group's exposure to interest rate, exchange rate and liquidity risks, principles which had been in force for several years.

The general principle is to concentrate these risks within capital market activities, where they are monitored and controlled using the methods described above. These methods ensure that risks related to commercial transactions and proprietary transactions (transactions involving shareholders' equity, investments, bond issues) are covered as fully as possible, either individually or globally.

Consequently, "structural" risks only arise from the residual positions attached to these operations, after hedging.

Organization

Monitoring structural risks is the responsibility of the head of each of the Group's operating divisions. Each of these divisional heads is assisted by a "structural risks officer", responsible for risk analysis and reporting (first-level controls). Entities use a common system for reporting structural risks.

The Asset and Liability Management unit of the Finance and Corporate Planning department is responsible for directly monitoring domestic activities, as well as consolidating the risks taken by each Group entity. This unit also assists in preparing and validating the models used by the different divisions (second-level control).

The unit works in liaison with the division finance departments, which are responsible for the quality of information reported. These quarterly reports on structural risk are of an accounting nature.

Lastly, the Finance Committee, which meets at General Management level, validates the methods for analyzing and assessing risks and sets exposure limits for each Group entity. The Finance Committee periodically examines the analysis of interest rate, currency and liquidity risks drawn up by the Asset and Liability Management unit. The Finance Committee also examines the main issues relating to structural risk management.

Structural interest rate risks

Structural interest rate risks arise from residual surpluses or deficits on fixed-rate outstanding positions with future maturities – after hedging.

Structural interest rate risks are analyzed on the basis of a global assessment of the evolution of outstanding positions for both fixedrate and floating-rate products.

Assets and liabilities are analyzed independently, without any a priori allocation of funds. The maturity of the outstanding positions takes account of models of historical client behavior patterns (special savings accounts, early redemption, etc.), as well as assumptions relating to some aggregates (principally shareholders' equity and sight deposits).

Options are analyzed through their delta equivalent, in order to ensure that they can be added to the underlying assets. The determination of gaps enables calculation of the position's sensitivity to changes in interest rates.

The current stress test corresponds to an immediate parallel shift of 1% in the yield curve. The impact of this scenario on the current net value of the portfolio of assets and liabilities is compared with the defined limits.

Deposits relating to retail banking activities in France are mostly considered to be fixed-rate funds, and their total exceeds the duration of commitments of a similar nature. Due to macro-hedging operations, essentially carried out through fixed-rate swaps, and on the basis of the assumptions used, the sensitivity of the French Networks is low. Overall the retail banking sensitivity in France is less than EUR 100 million.

Transactions with large corporates are match-funded and therefore present no interest rate risk.

Consequently, the majority of the Group's residual position is linked on the one hand to that part of equity reinvested in fixed-income instruments and, on the other, to foreign currency deposits held in subsidiaries or branches based in countries with weak currencies, where these deposits are not reinvested over a sufficiently long investment horizon, often due to the absence of appropriate long-dated fixed-rate instruments or hedging products such as swaps.

Risk management

Société Générale's total exposure continued to represent a very small portion of the Group's equity, below the overall limit of 2.5% set by General Management.

Structural exchange rate risks

Structural exchange rate risks essentially arise from:

• foreign currency denominated investments in shareholdings of subsidiaries or branches financed through a purchase of the foreign currency,

• retained earnings in foreign entities,

• investments made by some entities for regulatory reasons in a currency other than that used for its funding.

Société Générale chooses to take up these positions, since Group policy is to purchase strong currencies (USD, CZK, GBP, JPY) to finance investments in shareholdings of subsidiaries or branches.

For accounting purposes, the result of these positions is booked under translation differences, which are included in shareholders' equity and therefore contribute to hedge the Group's solvency ratio against exchange rate fluctuations. The Group's aim is to render its solvency ratio insensitive to exchange rate fluctuations.

Liquidity risk

Through its retail banking activities in France and abroad, Société Générale has a large and diversified deposits base, which provides permanent resources to finance domestic activities and which produces surplus liquidity. Credit transactions with international customers are financed on the large, extremely liquid deposit certificates market in the United States and on the interbank market. Securities activities mainly involve liquid securities, financed through repurchase agreements.

Due to the stability of Group resources, for several years Société Générale has mainly issued bonds via subordinated loans or structured issues intended to meet specific commercial requirements. Similarly, use of the overnight market is deliberately restricted, in order to protect the Group from very short-term risks.

Operational risks

General description

Operational risk is defined as the risk of losses resulting from the unsuitability or failure of internal procedures, persons or systems, or caused by external events (disasters, fire, physical attacks, changes in regulations, etc.). They include risks linked to the security of information systems, legal and regulatory risks and environmental risks, along with risks to the Bank's business activity and reputation risk.

Operational risk is inherent in each of the Group's businesses and service activities. Its management is based on a system of prevention, control and coverage, integrating detailed procedures, permanent supervision and insurance policies, alongside work carried out by the internal audit and General Inspection departments.

Approach adopted by the Group

Over the last few years, the Group has developed a thorough and coherent approach designed to reinforce the control and active management of operational risk within the Group.

The target system is based on a coherent series of procedures, measurement tools, management methods and reporting. It is in line with the Basel Committee's 2003 publication "Sound Practices for the Management and Supervision of Operational Risk" and meets the new regulatory requirements concerning the solvency ratio to be implemented at the end of 2007. The Group has adopted the Advanced Measurement Approach (AMA) for the calculation of its regulatory capital.

The design of these tools and overall implementation of the project is the responsibility of the Operational Risk unit of the Basel II Program department. The practical application of the system is the responsibility of the operating divisions and corporate departments, and is currently in line with the multi-year plan approved by General Management.

The audit and General Inspection teams verify the integrity and solidity of the system and may use elements of the system in the preparation and execution of their assignments.

Operational risk management

The Group has appointed operational risk managers in all the operating divisions and corporate departments.

Since 2003, it has maintained a database of all internal operating losses, both in France and abroad. This common database is used to analyze losses (by type of event, cause, activity, etc.) and monitor their evolution, along with the proposed action plans. The Group is currently implementing an IT tool within its entities to standardize the collection and identification of losses. Each quarter, a list of internal losses is submitted to the General Management.

A specific methodology for evaluating the control environment has also been formally defined. This process is designed to alert the operating divisions as soon as possible if they are vulnerable to risks so that they can react and reduce potential losses. Under this methodology, the risks inherent in each activity are defined in a risk map, and the quality and efficiency of the corresponding control procedure is rated on a regular basis. Once the effectiveness of the chosen methodology has been tested by a panel of representatives from the entities, it will be deployed throughout the divisions as of the second half of 2005.

Operational risk measurement

The Group is developing an internal model to calculate the economic and regulatory capital that must be allocated to operational risks. This model is based on an LDA approach (Loss Distribution Approach) and integrates internal losses, analyses of potential loss scenarios, the effects of the diversification of the Group's businesses and its insurance cover.

Legal risks

Dependency

Société Générale is not dependent on any patent or license, nor on any industrial, commercial or financial provisioning contract.

Risks and litigation

■ Risks arising out of material litigation matters initiated against the Group are subject to a quarterly review. To this end, the managers of the subsidiaries and the branches, in France and abroad, draw up a report every quarter setting forth these litigations and assessing the potential loss if any. These reports are forwarded to the Parisian Headquarters where they are reviewed by a committee headed by the Corporate Secretary and composed of members of the Financial, Legal and Risk Departments. This committee gives grounded advice on the basis of which the General Management decides the reserves' amount or its reversal.

■ Like many financial institutions, Société Générale is subject to numerous litigations, including securities class actions lawsuits in the US, and to regulatory investigations. The consequences, as assessed on December 31, 2004, of those that are liable to have or have recently had a significant impact on the financial condition of the Group, its results or its business have been provisioned in the Group's financial statements. Subject to the details set below concerning the major cases, other litigation matters have no material effect on the Group's financial condition or it is still too early to determine at this stage whether they may have such an impact or not.

■ On January 19, 2000, High Risk Opportunities Hub Fund Ltd. (HRO), a hedge fund in receivership, represented by its receivers, commenced a lawsuit against Société Générale (and another bank), before the Supreme Court of the State of New York asserting two claims for breach of contract relating to a series of non-deliverable USD/Russian ruble foreign exchange transactions.

In April 2003, Société Générale and HRO entered into a settlement agreement which, since then, has been approved by the Cayman's court of appeal after having been dismissed by the Grand Court. The transaction is now final and has been carried out in 2004. Its financial consequences for the Group have been charged on the provision previously constituted.

Risk management

■ In January 2002, Société Générale was informed that Frank Gruttadauria ("Gruttadauria"), a former employee of SG Cowen's retail brokerage business that was sold in October 2000, had defrauded numerous customers and misappropriated their assets at various firms that had employed him, including SG Cowen. Gruttadauria has been convicted and sentenced in federal court in Ohio to a sevenyear term of imprisonment for his crimes. Numerous former customers of SG Cowen have commenced or threatened to commence lawsuits and arbitrations against Société Générale and SG Cowen arising out of Gruttadauria's fraudulent conduct. Société Générale and SG Cowen have reached settlements with many former customers and are attempting to resolve the remaining disputes with their former customers, but some lawsuits and arbitrations filed by former customers are still ongoing. SG Cowen has reimbursed former customers for the out-of-pocket losses they incurred resulting from Gruttadauria's misconduct.

In August 2003, SG Cowen entered into consent orders with the New York Stock Exchange ("NYSE") and the US Securities and Exchange Commission ("SEC"), under which SG Cowen was charged with failure to supervise Gruttadauria during the 27-month period he was employed by SG Cowen, and violations of the federal securities laws arising out of SG Cowen's failure to maintain accurate and complete books and records during the same time period. Pursuant to the orders, SG Cowen agreed, among other things: to a censure imposed by the SEC, to pay a total of USD 5 million in fines to the NYSE and the SEC, to undertake a review of certain firm policies, procedures, practices, and supervisory systems, and to participate in an expedited arbitration procedure to resolve the claims of former customers who choose to take advantage of the procedure.

On December 16, 2003, SG Cowen entered into an agreement with the Cuyahoga County (Ohio) Prosecutor under which the Prosecutor agreed not to file any civil, criminal or administrative charges against SG Cowen relating to the criminal activities of Gruttadauria while he was an employee of the firm from July 1998 through October 13, 2002. SG Cowen agreed to pay a total of USD 4.5 million to Cuyahoga County and the State of Ohio, representing the forfeiture of certain fees generated by Gruttadauria and the cost of the Prosecutor's investigation.

Société Générale has established provisions for all the reasonably anticipated financial consequences of this matter.

■ SG Cowen is one of several defendants named in lawsuits arising out of the accounting fraud that caused the collapse of Lernout & Hauspie Speech Products, NV ("L&H"), a former client of SG Cowen. In one lawsuit pending in federal court in Boston, the former owners of Dragon Systems, Inc. allege that SG Cowen violated federal securities and state laws by making material misrepresentations to the plaintiffs while SG Cowen was advising L&H in connection with its acquisition of Dragon and published materially misleading research on L&H. Discovery has recently been completed. SG Cowen and the plaintiffs each have filed motions for summary judgement. Each party's respective motion argues that the facts adduced during discovery warrant judgment in its favor as a matter of law. If the court were to grant SG Cowen's summary judgment motion, the complaint would be dismissed.

In another lawsuit pending in the same court, the Trustee of the Dictaphone Litigation Trust has alleged that SG Cowen had made material misrepresentations to Dictaphone while SG Cowen was a financial advisor to L&H on its acquisition of Dictaphone, and published materially misleading research on L&H, in violation of various federal and state laws. The court has granted SG Cowen's motion to dismiss the complaint. The plaintiff is expected to file an appeal, but has not yet done so because the order of dismissal is not yet a final order because there are still claims pending against other defendants.

In a last L&H lawsuit pending in federal court in New Jersey, shortsellers of L&H stock allege that SG Cowen participated in a scheme to artificially inflate L&H's stock price through allegedly false and misleading research reports published by SG Cowen, in violation of federal securities laws and state laws. SG Cowen's motion to dismiss the complaint is pending.

Société Générale has established reserves for these matters.

■ After conducting investigations on tax frauds allegedly committed by buyers of certain types of companies in Belgium since 1997, the Belgian State and the liquidator of some of these companies have brought actions against the various participants in these transactions in an attempt to recuperate the eluded tax or to seek damages. Société Générale and one of its affiliates were implicated in 2004, because of the role played as counsel in several transactions by an ex-employee of the bank, now deceased, who concealed from Société Générale that he continued to play this role in spite of the prohibition notified to him by this supervisor several years ago, after the risks of such transactions had been identified. Société Générale fully cooperated with the Belgian State's investigations. These investigations having given rise to the opening of a criminal proceedings, Société Générale and its affiliate have also filed a complaint to shed light on the circumstances of this case. A provision has been made. ■ In July 2004, the European Commission conveyed a Communication des griefs (statement of objections) to nine French banks including Société Générale, and to the Groupement des cartes bancaires. The objections relate to an alleged secret and anticompetitive agreement on bank payment cards by which the banks, colluding with the Groupement des cartes bancaires, are alleged to have agreed to erect entrance barriers to the French market of the issuance of payment cards in order to preclude competition from new entrants and to reduce competition between themselves. In the Commission's view, the alleged agreement would severely limit the scope for lower card prices and technical innovation. Société Générale has answered to these allegations which it considers unjustified and intends to demonstrate that the tariff reform, adopted in late 2002, is wholly consistent with the law and fully justified. The implementation of this reform has been suspended after the Commission initiated the investigation, a few weeks before receipt of the statement of objections.

Environmental risks

See page 63.

Insurance for operational risks

Description of insurance policies: general policy

Société Générale has a global insurance policy that consists in seeking the broadest and most comprehensive guarantees available with respect to the risks to which the Group is exposed. Additional insurance policies may be taken out locally, to provide either first-level guarantees that may be below the global guarantee thresholds, or particular guarantees applicable to specific activities.

The contraction of the insurance market since 2001 has made it more difficult to set up insurance programs adapted to the Group's requirements, a problem shared by all major companies.

In the case of traditional guarantees, the Group was able to renew the majority of the policies bought on the market. Despite the difficulties experienced by insurers, Société Générale kept and in some cases improved its existing level of cover, particularly as regards guarantees for risks linked to financial activities.

The Group has an internal reinsurance company that intervenes with some policies to reduce the deductible imposed by insurers, which in some cases is particularly high.

As a result, despite the contraction in the market for the insurance of these risks, the Group was able to set up insurance policies that considerably exceed the level of losses realized.

Description of cover

■ General risks

1. Buildings and their contents, including IT equipment, are insured at their replacement value. In France, the budget amounted to EUR 3.7 million.

2. Liability other than professional liability (i.e. relating to operations, chief executive officers, vehicles, etc.) is covered by insurance policies around the world. The amounts insured vary from country to country, but correspond to operating requirements. In France, the budget amounted to EUR 1.9 million.

■ Risks arising from activity

Insurance is only one of the ways of offsetting the consequences of the risks inherent in the Group's activity, and as such it complements the Group's risk management policy.

1. Mortgage loans

90% of mortgage loans granted by the bank are accompanied by life insurance policies covering the borrower.

2. Theft/fraud

These risks are included in a "global banking" policy that insures all the Bank's activities around the world.

3. Professional liability

The consequences of any lawsuits are insured under a global policy. The level of cover is the best available on the market.

4. Operating losses

The consequences of an accidental interruption in activity are insured under a global policy. This policy complements the business continuity plans. The amounts insured are designed to cover losses incurred between the time of the event and the implementation of an emergency solution.

Other risks

The Group is aware of no other risk to be mentioned in this respect.

Regulatory ratios

Reform of the international solvency ratio (Basel II reforms)

On June 26, 2004, the Basel Committee published a text defining the terms of the reform of the international solvency ratio which is to take effect as of 2008.

In terms of credit risk, in addition to the "standardized" approach, the new text authorizes lending institutions to calculate their capital requirements using their internal models and according to two approaches: a "foundation" approach (Internal Ratings Based – Foundation or IRBF) and an "advanced" approach (Internal Ratings Based - Advanced or IRBA).

The Société Générale Group intends to use the IRBA advanced internal ratings method in monitoring and managing credit risk on the majority of its portfolios. To do so, the Group will need to obtain the approval of the Secretary General of the French Banking Commission who will notably verify that said internal ratings methods are inherent to Société Générale's risk culture and that they comply with the requirements of the reform. In 2008, however, part of the Group's commitments (certain transactions, certain overseas subsidiaries, etc.) will continue to be subject to the "standardized" or "foundation" (IRBF) approach, the aim being to extend the application of the IRBA method to all types of transaction.

Launched in 2003, Société Générale's "Basel II" project is a major initiative that affects all Group activities, the Risk Division and the Group's Finance Department. Monitored by the Group's General Management, the project has the following aims:

• to adapt the existing internal ratings system to the provisions of the new Basel text, notably by developing counterparty ratings models based on an estimation of the probability of default at one year as well as transaction ratings models based on an estimation of loss given default;

• to ensure the systematic use of these internal ratings for the majority of the Group's portfolios and entities, notably when it comes to approving loans;

• to heighten and ensure the complete and systematic gathering of information regarding defaults and losses booked in order to control the validity and accuracy of the internal ratings models used on a regular basis ("back testing");

• to define and implement procedures and systems that comply with the new regulatory requirements, particularly as regards the rating of counterparties and transactions, the factoring in of guarantees and collateral and collection of data on defaults and losses;

• to develop information systems to automatically calculate capital requirements and solvency ratios according to the provisions of the text published by the Basel Committee;

• to justify the quality of the data used to calculate the ratio by proving its coherence with accounting figures.

The three-year period during which credit institutions must be able to justify an internal ratings culture for all portfolios for which advanced ratings methods are used applied to Société Générale Group as of the start of 2005.

The next milestone is the "parallel calculation" period which will run from the start of 2006 to the end of 2007 and during which institutions will be required to submit a solvency ratio calculated on the basis of the new Basel texts to the Secretary General of the French Banking Commission along with the international solvency ratio.

International solvency ratio (B.I.S. ratio)

The international solvency ratio requires financial institutions handling a significant volume of international business to maintain a minimum level of equity in reserve on a permanent basis, in order to cover their credit exposure and capital market risks.

Until December 31, 1997, the B.I.S. ratio was essentially limited to counterparty risks. Since January 1998, it has been extended to cover market risks (interest rate, exchange rate, equity price and commodity price risks).

The regulatory framework for monitoring market risk exposure allows banks to calculate their regulatory capital requirements using internal models, provided that these models meet certain criteria and reflect an adequate risk management strategy, and that the model itself has been approved by the banks' supervisory authorities. Société Générale's internal VaR model has been approved by the French Banking Commission (see section on "Methods of measuring market risk", p.140)

Since December 31, 1998, the market risks for the majority of transactions have been calculated using this internal model, while the standard method is used for all other operations.

The Group's B.I.S. ratio stood at 11.86% at December 31, 2004, excluding Tier-3 capital, compared with 11.68% at end-December 2003 and 11.13% at end-December 2002.

RISK-BASED CAPITAL, RISK-WEIGHTED ASSETS AND SOLVENCY RATIOS

In millions of euros at December 31	2004	2003	2002
Risk-based capital
Group shareholders' equity	18,576	16,877	15,734
Dividends	(1,339)	(1,201)	(853)
General reserve for banking risks	284	312	207
Minority interests after appropriation of net income	1,920	1,847	1,768
Preferred shares	2,049	2,120	1,668
Prudential deductions (1)	(3,129)	(3,194)	(3,265)
Total Tier-1 capital	18,361	16,941	15,259
Total Tier-2 capital	9,983	9,066	9,219
Other deductions(2)	(2,858)	(3,164)	(3,621)
Total risk-based capital	25,486	22,843	20,857
Risk-weighted assets	214,976	195,593	187,384
International solvency ratio (B.I.S. ratio)	11.86%	11.68%	11.13%
Tier-1 ratio	8.54%	8.66%	8.14%

(1) Essentially goodwill and intangible assets.

(2) Holdings in non-consolidated financial companies or those accounted for by the equity method.

Regulatory ratios

Group shareholders' equity at end-December 2004 totaled EUR 18.6 billion (compared with EUR 16.9 billion in 2003). After taking into account minority interests, preferred shares, the general reserve for banking risks and prudential deductions, total Tier-1 capital stood at EUR 18.4 billion, giving a Tier-1 ratio of 8.54% at December 31, 2004 (compared with 8.66% at December 31, 2003).

Risk-weighted assets by type of activity break down as follows:

• the increase in risk-weighted assets over 2004 (EUR +19.4 billion) resulted from the rise in counterparty risks. These accounted for 95.5% of risk-weighted assets, amounting to EUR 205.2 billion at December 31, 2004 (95% at December 31, 2003),

• risk-weighted assets relating to market risk accounted for 4.5% of the total, down slightly on 2003 (5%).

The credit risk on derivatives essentially relates to instruments with maturities under five years (a detailed analysis of these instruments is included in the notes to the consolidated financial statements on page 192, note 21).

BREAKDOWN OF RISK-WEIGHTED ASSETS BY TYPE OF RISK At December 31,

Capital adequacy ratio (CAD ratio)

This ratio replaced the European solvency ratio in 1998, and sets out the minimum capital required to cover counterparty and market risks.

At December 31, 2004, these risks were 156.8% covered by Group equity, excluding any Tier-3 capital (compared with 156.7% at December 31, 2003).

As with the international solvency ratio, the Group's equity requirements principally arise from "plain vanilla" banking activities.

Ratio of large exposures

The ratio of large exposures is calculated on a quarterly basis but is complied with on an on-going basis by Société Générale Group: • the total risk incurred by Société Générale in respect of any debtor taken individually does not exceed 25% of consolidated net equity, • the total risk incurred by Société Générale in respect of all debtors which, taken individually, represent risks of over 10% of consolidated net equity, does not exceed eight times consolidated net equity.

Liquidity ratio

Société Générale's one-month liquidity ratio, which is used to monitor short-term liquidity, averaged 113.7% over 2004. At the end of each month in 2004, it was above the minimum regulatory requirement of 100%.

Prudential ratio

(funding ratio)

The prudential ratio, which is used to determine long-term liquidity, measures receivables due in more than five years against funds with a remaining maturity of more than five years. At December 31, 2004, this ratio stood at 87.8%, above the minimum regulatory standard of 80%.

Report of the Chairman on internal control procedures

This report has been prepared in compliance with articles L. 225-37 and L. 225-68 of the French Commercial Code, pursuant to Article 117 of the law on financial security dated August 1, 2003. It relates to the internal controls carried out by the consolidated Société Générale Group and is in no way intended to provide a detailed description of the internal control procedures implemented across each of the Group's activities and subsidiaries. Moreover, the chairman of each French limited liability company that is a subsidiary of the Group is required to draft a specific report.

Given the extent and diversity of the risks inherent in banking activities, internal control within banks is a vital instrument in risk management and thus plays an important role in ensuring the sustainability of their activities. It operates within of a strict regulatory framework defined at a national level, and is also a focus of various projects at an international level (Basel Committee). Internal control concerns all areas of the Group. Indeed, while the primary responsibility therein lies with the operational staff, a number of support departments are also involved, notably the Risk Division, the Internal Audit Department and the General Inspection Department, together with all of the Group's finance departments.

Furthermore, where appropriate, the above-mentioned departments also contributed to the present report.

Internal control operates within a strict regulatory framework to which all banking establishments are subject and which concerns all Group staff

A strict regulatory framework

The conditions for conducting internal controls in banking establishments are defined in the amended regulation No. 97/02 of the French Banking and Financial Regulation Committee. This text, which applies to all credit institutions and investment companies, defines the concept of internal control, together with a number of specific requirements relating to the measurement and limitation of the various risks inherent in the activities of the companies in question, and the procedures under which the deliberating body must assess and evaluate the quality of the internal controls carried out.

In June 2004, the Basel Committee defined the four principles – independence, universality, impartiality, and sufficient resources – which must form the basis of the internal audits carried out by credit institutions.

At Société Générale, these principles have been applied primarily through five directives, one of which constitutes the Group Audit Charter, while the other four relate to the work of the Risk Division, the management of credit risks, the management of market risks and the management of interest rate, exchange rate and structural liquidity risks.

The Audit Charter defines internal control as the resources that enable the Group's General Management to ascertain whether the transactions carried out and the organization and procedures in place within the Company are compliant with the legal and regulatory provisions in

The Role of the Board of Directors' Audit Committee

In addition to its responsibilities relating to the work of the Statutory Auditors (selecting the auditors, ensuring they are independent and examining their work schedule), the Audit Committee also plays an essential role in the Board of Directors' assessment of the Group's internal control. As such, the Committee is responsible for the following:

■ examining the consistency of the internal mechanisms implemented to control procedures, risks and ethical compliance;

■ examining the Group's schedule of internal audits and the annual report on internal controls, which is drawn up in accordance with banking regulations, and evaluating the organization and functioning of the internal control departments;

■ examining follow-up letters sent by the French Banking Commission and commenting on the draft responses to these letters;

■ examining the policy for risk management and monitoring offbalance sheet commitments, notably in accordance with the procedures therein drafted by the Finance Department, Risk Division and Statutory Auditors.

In order to carry out these functions, the Audit Committee is entitled to question, as it sees fit, the chief executive officers of the Company, the Statutory Auditors and the managers in charge of the accounts, internal control, risk management and ethical compliance (see "Corporate Governance", p. 21).

Report of the Chairman on internal control procedures

force, professional and ethical practices, internal regulations and the policies defined by the Company's executive body. Internal control is designed to:

• detect and measure the risks borne by the Company, and ensure they are adequately controlled;

• guarantee the reliability, integrity and availability of financial and management accounting information;

• verify the quality of the information and communication systems.

The departments involved in internal control

The first level of responsibility for internal control lies with the operational staff.

At the same time, a number of corporate departments, which are independent from the operating departments, also control Group transactions. The role of each of these departments is covered in further detail below:

• The Risk Division, which is responsible for identifying and monitoring all risks borne by the Group.

• The Group Finance Department, which, in addition to its strategic and financial management responsibilities, also carries out extensive accounting and finance controls.

• The Division Finance Departments, which are hierarchically attached to the division managers and functionally attached to the Group Finance Department. They make sure that decisions taken at a local level are correctly implemented and control the quality of the information in the consolidated financial reports submitted to the Group.

• The Group Compliance Department, which ensures that all compliance rules and principles applicable to the Group's banking and investment activities are disseminated throughout the company and respected by its staff.

• The Group Legal Department, which monitors the legality of the Group's activities in collaboration with the legal departments of its subsidiaries.

• The Group Tax Department, which monitors compliance with all applicable tax laws.

• The Internal Audit Departments, which are hierarchically attached to the division managers and functionally attached to the General Inspection Department and which carry out regular controls.

• The General Inspection Department.

With the exception of the Division Finance and Audit Departments, all these functional departments report directly to Group General Management or the Corporate Secretary. They are also responsible for submitting any information required by the Executive Committee for the strategic management of the Company under the authority of the Chairman and Chief Executive Officer.

A strictly controlled acquisition process

In light of the risks inherent in the acquisition of new entities, the Group has implemented a clear body of rules that is updated on a regular basis.

Acquisition projects are analyzed thoroughly to assess their potential for value creation. Group internal rules specify that the following aspects must be examined in depth:

• the various risks inherent to the project;
• the reliability of financial and management accounting data;
• internal control procedures;
• the soundness of the Company's financial position;

■ how realistic the development forecasts are, in terms of both cost synergies and earnings growth;

■ the conditions for integration and the follow-up of this integration. This pre-acquisition evaluation is conducted by the business lines with the help of specialists where required (representatives of the business lines, the Risk Division, the General Inspection Department, the Accounting Department, the Legal Department, etc.).

The Group Finance Department then submits a report based on this analysis to the Executive Committee, which takes the final decision. Once acquired, the entity is integrated into the relevant division of the Group according to specific procedures, which are evaluated every six months by the appropriate management level, according to the importance of the acquisition (Chief Financial Officer, Group General Management, Executive Committee).

A diagnosis is carried out of any internal controls, notably in terms of risks, accounting and financial data and, depending on the activities of the entity in question, in terms of compliance procedures. Measures are then taken to bring the entity in line with Group standards as quickly as possible. Moreover, the Company has implemented a specific procedure whereby strategic acquisitions are monitored by

the Group Audit Committee and the Board of Directors. A development plan is thus drawn up upon the acquisition of a new entity and then reviewed some two years later. As such, the acquisitions of GEFA/ALD and TCW were reviewed in 2003 and Komercni Banka in 2004.

ORGANIZATIONAL CHART OF THE DEPARTMENTS INVOLVED IN INTERNAL CONTROL

Risks: evaluation, management and ongoing control

Banking activities are subject to a variety of risks

Given the diversity and ongoing evolution of its activities, the Group is exposed to a wide variety of risks, which are generally grouped into four categories:

• credit risks (including country risk): risk of loss arising from the inability of the bank's customers, sovereign issuers or other counterparties to meet their financial commitments.

• market risks: risk of loss resulting from changes in market prices and interest rates, in correlations between these elements and their volatility.

• structural risks: risk of loss arising from an inability to refinance the bank's balance sheet at reasonable interest rates for the appropriate maturities.

• operational risks (including legal, compliance, accounting and environmental risks): the risk of loss or fraud or of producing incorrect financial and accounting data due to inadequacies or failures in procedures and internal systems, human error or external events.

Risk management procedures are defined at the highest management level

The Group organizes a monthly Risk Committee meeting, at which the Executive Committee defines the framework required to manage risk, reviews changes in the characteristics and risks of Group portfolios, and decides on any necessary strategic changes. The Group also has a "Major Risks" Committee, which focuses on reviewing areas of substantial risk exposure (individual files or segments of a portfolio).

In addition, each division is required to submit any new products or activities to their respective New Product Committee, which ensures that the associated risks are correctly analyzed, measured and controlled before the product or activity can be launched.

Lastly, the procedures for managing, preventing and evaluating risks are analyzed in-depth by the Board of Directors and, in particular, its Audit Committee.

Report of the Chairman on internal control procedures

An independent Risk Division, responsible for implementing an efficient risk management system and for ensuring coherent risk monitoring at a consolidated Group level

The Group Risk Division is an independent function reporting directly to Group General Management. It comprises some 500 members of staff responsible for promoting the development and profitability of the Group by ensuring the risk control system in place is both robust and efficient and by monitoring operations carried out within the Group.

Accordingly, the Group Risk Department is in charge of identifying all risks borne by the Group, defining and validating all methods and procedures for analyzing, measuring, approving and monitoring risks and is responsible for ensuring risk information systems are adequate, managing risk portfolios, monitoring cross-disciplinary risks as well as anticipating risk provisioning for the Group. Furthermore, it also assists in the appraisal of risks on transactions proposed by the Group's sales managers.

Procedures and organization

Based on the monitoring framework defined by the Risk Committee, a set of specific procedures has been compiled for each type of risk.

■ Procedures for counterparty risks:

• The Risk Division submits its recommendations to the Risk Committee on the specific concentration limits it feels are appropriate at a given time for different countries, geographic zones, sectors, products, client types, etc.

• All requests for authorization received from the business lines regarding a particular client or client group are directed to a single sales department that has in-depth knowledge of the client.

•The business lines and Risk Division submit all commitment files for analysis and approval to the team best suited to deal with the type of risk incurred.

■ Procedures for market risk:

• Based on the Risk Divisions recommendations, the Group Risk Committee defines limits for each type of activity which are then submitted for approval by the Board of Directors.

• Independent middle-office teams report daily on risks and results.

• Dedicated risk controllers on the trading floor monitor trading positions and results on a permanent basis, carry out daily checks on the market parameters used to calculate risks and results, and calculate the daily market risk exposure.

• Precise methods have been defined for evaluating risks, and the Risk Division must validate the valuation models used to calculate risks, results and provisioning levels.

These procedures and structures have been progressively adapted to accommodate for regulatory change and the rapid growth of increasingly sophisticated activities. Some controls are further heightened through tailored action plans.

■ Structural risk is managed by each division finance department, which analyses exposure and prepares the necessary reports. The Group Finance Department's asset/liability management unit monitors structural risk at a consolidated level and provides support to the various entities by validating their models and methods.

Lastly, the Finance Committee, which is part of the Group's General Management, approves all risk analysis and evaluation methods and sets the exposure limits for each Group entity.

■ Given their importance within the banking sector, and in accordance with the recommendations of the Basel Committee on Banking Supervision, the Group's General Management has adopted a rigorous and coherent approach to reinforce the management of operational risks across the businesses. This approach includes a number of measures such as the compilation of a map of the different types of operational risks, the creation of databases for internal and external operational losses and the implementation of specific procedures to monitor and control risk exposure. This is all part of a common framework of procedures, tools and methods defined and developed by the Basel II Program Department, but implemented by the operating and corporate departments.

Moreover, the procedures for managing crises are regularly tested within the framework of the initiatives in place to ensure the continuity of the Group's businesses. These initiatives are supervised by a dedicated department set up this year.

Methodology and information systems

Société Générale dedicates significant resources to adapting risk management and monitoring methods to its various activities. Its information systems, in particular, are constantly modified to accommodate changes in products traded and associated risk management techniques.

In the case of counterparty risk with respect to capital market products, the current methods used to measure exposure are backed up using stress tests to reinforce the transaction selection process.

With respect to market risks, the current in-house risk measurement model has been approved by the French Banking Commission for use with nearly all types of transaction.

In terms of credit risk, existing approval and monitoring procedures have been reinforced over the last few years with the introduction of economic capital, risk-adjusted return on capital (RAROC) and economic value-added (EVA) indicators. As a result, major efforts have been made to model the Group's activities and adapt its information systems accordingly.

More generally, risk information systems are constantly streamlined in order to allow for direct reporting and to avoid repeated entries that are sometimes the source of errors. All anomalies are analyzed and monitored by the quality teams of the Group Risk Division and Information Technology departments. Where applicable, action plans are implemented to correct any problems identified.

Conscious of the increasing exposure of its information systems to external risks given the growing number of sales channels such as the Internet, Société Générale has implemented a series of organizational and communication initiatives. These notably include the setting up of a security network coordinated by a Group information systems security manager with relays within the Group's different divisions, the creation of a unit to monitor safety and manage alerts and staff information as to the different measures to be taken in tackling information system risks.

Compliance controls

The compliance of the Group's operations is monitored by:

• the Compliance Department, which ensures that all compliance rules and principles applicable to the Group's banking and investment activities are disseminated throughout the company and respected by its staff;

• the Legal and Tax Departments, which monitor all fiscal and legal aspects of the Group's activities.

These central departments report to the Group's Corporate Secretary and are represented by local staff within each operational entity and, in certain subsidiaries, by those departments that exercise the same type of function. The central teams are responsible for all monitoring and training therein as well as for the dissemination of all relevant information throughout the Group.

The permanent supervision of activities at a local level by operational staff forms the cornerstone of internal control within Société Générale Group

This comprises all procedures implemented on a permanent basis to guarantee that transactions carried out at an operational level are correctly handled, secure and valid. The first level of responsibility for internal control lies with the operational staff.

Permanent supervision comprises two elements:

• Everyday security: all operational staff are required to permanently comply with the applicable rules and procedures in all transactions carried out.

• Formal supervision: management is required to make regular checks using written procedures to verify that staff are complying with the rules and procedures for processing transactions and for ensuring effective day-to-day security.

In order to ensure this system functions correctly, operating methods need to be formally defined and communicated to all Group staff. In addition, permanent supervision procedures are adapted for each Group entity according to their specific activities.

The Internal Audit Departments cover all entities within the Group

Internal Audit is a permanent system designed to evaluate the efficiency of the internal controls employed by the entity to which it is attached. All Group activities and entities have an Internal Audit Department, which is authorized to inspect all aspects of their operations. Given the risks at stake, each department is provided with the requisite resources to carry out its functions effectively from both a qualitative and quantitative point of view.

Société Générale's control system is split into two levels: the Internal Audit Departments and the General Inspection Department

Each Group division has its own Internal Audit Department, managed by a chief auditor (contrôleur général), who reports directly to the division manager. The chief auditor has hierarchical and functional authority over all the auditors in the division. The system was recently reinforced with the creation of an Audit Department for the Corporate Departments, which reports to the Group's Corporate Secretary.

The creation of Société Générale's GIMS division naturally prompted the regrouping of the internal control structures of the division's various activities with no impact on staff numbers or procedures.

Each Internal Audit Department regularly identifies the areas of risk to which its division is exposed. It then defines an annual schedule of audits to ensure that the exposure is covered in full. Entities within the Group's Retail Banking network, for example, are audited every 15.8 months, whilst, in the Corporate and Investment Banking Division, the highest-risk entities are audited once a year.

Within these assignments, the auditors carry out controls to check the security, compliance and efficiency of the division's activities, and evaluate the quality of the permanent supervision system in place. They then put forward recommendations based on their findings, and follow these up to ensure they are implemented correctly. In total, over 4,000 audit assignments (ranging in time between several days and several months) are carried out each year within the various Group entities. Any problems noted or recommendations put forward are integrated in a dossier which is then managed by the audit departments and General Inspection.

This system is reinforced with specialized audits in areas requiring specific expertise: these include accounting audits, legal audits and audits of counterparty risks and information technology security. The head of the corporate department in question takes direct responsibility for these specialized audits, and is thus able to monitor compliance with Group principles and procedures within the business and keep a closer eye on activities at operational level. The specialized audits can also complement the divisional audits in specific areas.

The General Inspection Department carries out around 100 assignments each year and verifies the overall quality of the internal control system

The General Inspection Department audits the business activities and operations of all entities within the Group. It reports its findings, conclusions and recommendations to the General Management, and covers all Group entities without exception. In the course of its assignments, it makes a certain number of recommendations, the implementation of which is monitored on a quarterly basis by the Group Executive Committee. The assignments are based on the annual audit plan validated by the Group's General Management.

Furthermore, the General Inspection Department is responsible for ensuring that the internal control system implemented across Société Générale and its subsidiaries is both coherent and effective.

Key figures

The Internal Audit Departments comprise some 1,100 members of staff.

The Group employs over 900 auditors, 80% of whom are employed in Retail Banking, 12% in Corporate and Investment Banking, 5% in Global Investment Management, with the remainder responsible for specialized audit assignments (accounting, legal, information technology, etc.).

The General Inspection Department, for its part, employs 190 members of staff including 154 inspectors and controllers. To do this, the General Inspection Department:

• audits the various corporate departments involved in internal control;

• assesses the quality of the work carried out by the audit departments. To this end, it receives copies of all reports submitted by the auditors and appraises their quality. It also conducts specific inspections of the Group audit departments themselves (3 assignments in 2004);

• validates the audit plans submitted by the audit departments;

• the Head of Group Internal Audit exercises functional control over the general controllers and the specialized audit managers. He manages all audit-related activities (coherence of recommendations and methods, implementation of shared tools and resources, etc.) To this end, he notably organizes Audit Committees within each Group division.

As part of his role, the Head of Group Internal Audit is required to meet regularly with the Audit Committee of the Board of Directors. During these meetings, he submits an annual report on the internal control system, as specified in article 42 of the amended regulation 97/02. The Audit Committee examines the Group internal audit plan and comments on the organization and functioning of the internal control departments.

The Head of Group Internal Audit also maintains close ties with the Statutory Auditors and representatives of the supervisory authorities. Lastly, the General Inspection Department works in conjunction with the Internal Audit Departments to ensure that the recommendations made by the supervisory authorities are implemented.

Control of the production and publication of financial and management accounting information

The departments involved

The departments involved in the production of financial data are as follows:

• The middle office in the Corporate and Investment Banking division validates the valuations of marketable financial instruments. It also reconciles the economic results produced by the front office with the accounting results produced by the back office.

• The back office is responsible for all support functions relating to transactions carried out by the front offices. It checks that financial transactions are economically justified, records transactions in the accounts and manages means of payment.

• The subsidiary and division finance departments carry out secondlevel controls on the accounting data and entries booked by the back offices and the management data submitted by the front offices. They compile the financial statements and regulatory information required at a local level and submit reports (accounting data, management control, regulatory reports, etc.) to the Group Finance Department. • The Group Finance Department gathers all financial and management accounting data compiled by the subsidiaries and divisions in a series of standardized reports. It consolidates and controls this information so that it can be used in the overall management of the Group and can be disclosed to third parties (supervisory bodies, investors, etc.).

Above and beyond its role of consolidating the Group's accounting and financial information, the Group Finance Department is also entrusted with large-scale audit assignments: it monitors the financial aspects of the Group's capital transactions and its financial structure; is responsible for asset/liability management, and consequently defines, manages and controls the Group's financial position and structural risks. Furthermore, it ensures that the regulatory financial ratios are complied with, defines accounting standards, reference frameworks, principles and procedures for the Group, ensures they are respected and verifies that all financial and accounting data published by the Group is reliable.

Audit Committees

Audit committees, which bring together the audit departments of each division with their hierarchical and functional management, play a vital role in the internal control system. They enable the functioning and activity of this system to be appraised at least once a year. In accor- dance with an agenda set by the Head of Group Internal Audit, they cover aspects such as permanent supervision, the assignments carried out over the course of the year and the forthcoming audit plan, the implementation of the General Inspection Department's recommendations and, where applicable, those of the supervisory authorities and external auditors.

Accounting standards

Local accounts are drawn up in accordance with local accounting standards, and the consolidated Group accounts are compiled in accordance with the standards defined by the Group Finance Department. The latter are based on general French laws and on legislation specific to the banking sector published by the French Accounting Regulation Committee. The Group Finance Department has its own standards unit, which monitors the applicable regulations and drafts new internal standards to comply with any changes in the regulatory framework. The Group has adapted its body of standards in order to produce financial and reporting statements that are compliant with IFRS, which shall apply to consolidated accounts from 2005.

Procedures for producing financial and accounting data

Each entity within the Group compiles its own financial and management accounting statements on a monthly basis. The information is then consolidated each month at Group level and published for the markets on a quarterly basis. The division finance departments also submit analytical reviews and notes validating their accounting data to the Group Finance Department to allow it to compile the consolidated financial reports (accounting, management reporting, regulatory, etc.) that it then transmits to the General Management and any interested third parties.

In practical terms, procedures have been tailored to the growing complexity of products and regulations. Moreover, specific action plans can be implemented where necessary. Indeed, in order to handle the strong growth in the volume of equity derivatives transactions and the increasingly complex nature of the products on offer, the Société Générale Group has invested significantly in the overhaul of the system used to process said transactions and whose implementation will be staggered between now and 2010.

Internal control procedures governing the production of accounting and financial data

■ Accounting data are compiled independently from the front offices

Accounting data are compiled by the back and middle offices, independently from the sales teams, to ensure the information is objective and reliable. These teams carry out a series of controls defined by Group procedures on the financial and accounting data:

• Daily verification of the economic justification of the reported information.

• Reconciliation, within the specified deadlines, of financial and management accounting data, in accordance with specific procedures.

• Production of a quarterly analytical report on the supervision carried out, which is submitted to the management of the entity or division, and to the Group Finance Department.

Given the increasing complexity of financial activities and organizations, staff training and the IT tools are reviewed on a permanent basis to ensure the production and verification of financial and management accounting data are effective and reliable.

■ Scope of control

In practice, the internal control procedures implemented by the various businesses are designed to guarantee the quality of the financial and accounting information, and notably to:

• Ensure the transactions entered in the Group's accounts are exhaustive and accurate.

• Validate the valuation methods used for certain transactions.

• Ensure that transactions (including off-balance sheet transactions) are correctly assigned to the corresponding fiscal period and recorded in the accounts in accordance with the applicable accounting regulations, and that the accounting aggregates used to compile the Group accounts are compliant with the regulations in force.

• Ensure the inclusion of all entities that must be consolidated in accordance with Group regulations.

• Check that the operational risks associated with the production and transmission of accounting data through the IT system are correctly controlled, that the necessary adjustments are made accurately, that the reconciliation of financial and management accounting data is satisfactory, and that the flows of cash payments and other items generated by transactions are exhaustive and adequate.

■ Second-level control by the division finance departments

The division finance departments employ over 500 staff across the Group to manage the transmission of accounting and financial data and carry out second-level controls. Financial data are transmitted via computerized accounting systems, which trace all events that generate an accounting entry (notion of audit trail).

The local finance departments, which are in charge of local accounts and reporting, harmonize this data with Group standards. They ensure the information is reliable and consistent with the various accounting frameworks defined for the Group.

At division level, the finance department controls the consistency of the data produced by the entities and, in conjunction with the Group Finance Department, resolves any difficulties in the interpretation of accounting, regulatory or management data.

■ Supervision by the Group Finance Department

Once the accounts produced by the various entities have been restated according to Group standards, they are entered into a central database and processed to produce the consolidated accounts.

The department in charge of consolidation checks that the consolidation scope is compliant with the applicable accounting standards and controls a number of aspects of the data received for consolidation: validation of the aggregates produced with the collected data, verification of recurrent and non-recurrent consolidation entries, exhaustive treatment of critical points in the consolidation process, and processing of any residual differences in intercompany accounts. Lastly, the department checks the overall consolidation process by carrying out analytical reviews of the summary data and checking the consistency of the main aggregates in the financial statements. Changes in shareholders' equity, provisions and any deferred taxes consolidated in the fiscal year in question are also analyzed.

A three-level accounting audit system, in line with the Group Audit Charter

■ Control by all operational staff involved in the production of accounting, financial and management data

The operational staff monitor their activities via a permanent supervision process which, under the direct responsibility of the management teams, reviews the quality of the controls carried out on accounting data and the associated accounting treatment.

■ Second-level control carried out by the division audit departments and the audit team in the Group Finance Department that is responsible for controlling accounting data and compliance with regulations (reporting to the Group Accounting Department) In the course of their assignments, the division audit departments systematically verify the quality of the financial and management accounting data produced by the audited entities. They check certain accounts, assess the reconciliations between financial and management accounting data, and the quality of the permanent supervision procedures for the production and control of accounting data. They also identify any areas where manual processing may be required to make up for gaps in the IT tools and which therefore need to be closely checked. The departments then make recommendations to those people involved in the production and control of accounting, financial and management data in order to improve this process through more specific initiatives aimed at particular entities or activities.

Role of internal control procedures in the changeover to IAS

In 2004, part of the Group's accounting and regulatory audit activities concerned the "implementation" of IFRS. This notably included the provision of training as well as the activities of the Technical Commit- tees set up to define the Group's technical positions.

In 2004, the audit team also took part in the design and distribution of two self-appraisal questionnaires on the application of the new Group standards defined in compliance with IFRS standards and which were aimed at assessing the extent to which the Group's entities were prepared for the implementation of the new standards.

Report of the Chairman on internal control procedures

The audit team responsible for controlling accounting data and compliance with regulations carries out the following functions:

• Permanent supervision of the application of accounting standards and regulations. It issues questionnaires designed to assess whether the accounts submitted to the head office are compliant with Group standards.

• Specific audits, requested by the Finance Department, or following the publication of any new accounting directives or regulations that significantly modify the accounting and/or regulatory treatment of transactions.

• Provision of technical and methodological expertise to the general division audit departments or to the General Inspection Department, notably through joint inspections.

• Preventive intervention at entities that are to be integrated into the Group in the near future, in order to evaluate the impact of the application of Group accounting standards.

• Maintenance of links with the Group Statutory Auditors and monitoring of recommendations issued by external bodies.

This specific control body comprises experienced audit professionals, and helps to ensure the security of internal controls relating to the production of consolidated accounting and regulatory information.

■ Third-level control carried out by the General Inspection Department

At the third level of control, the General Inspection Department carries out accounting audits as part of its inspection assignments, but also conducts specific audits to check the quality of the controls carried out by the staff responsible for producing accounting, financial and management data. In 2004, for example, the General Inspection Department completed a specific audit on the way in which nonperforming loans are handled and provisions are booked within the Group's Retail Banking Network, and audited the accounting treatment of expenses and invoices in the Group's Corporate and Investment Banking arm.

Developments underway

Within the framework of its Basel II project, the Société Générale Group is reinforcing its risk management structures with stricter procedures, and continuing to work on the accuracy of its risk modeling and the streamlining and interoperability of its risk information systems.

Work continues on the changeover to IAS with the auditing of the Group's accounting and regulatory controls and, as of 2005, various audit assignments on the bank's most sensitive activities.

Furthermore, the organization of the Risk Division continues to benefit from the improved integration of its dedicated teams within the bank's operational entities. So as to ensure that the rules governing market activities are effectively applied, the Société Générale Group decided in 2004 to impose the systematic presence of compliance officers reporting to the Compliance Department in all dealing rooms as well as to reinforce the structures currently in place in Paris (for further details, refer to the chapter on "Compliance and prevention of money laundering", p. 49).

Report of the Statutory Auditors

prepared in accordance with article L. 225-235 of the French Company Law (Code de commerce), on the report prepared by the President of the Board of Directors of Société Générale, on the internal control procedures relating to the preparation and processing of financial and accounting information.

Year ended December 31, 2004

This is a free translation into English of a report issued in the French language and is provided solely for the convenience of English speaking readers. This report should be read in conjunction with, and construed in accordance with, French law and professional auditing standards applicable in France.

To the shareholders of Société Générale,

In our capacity as Statutory Auditors of Société Générale, and in accordance with article L. 225-235 of the French Company Law (Code de commerce), we report to you on the report prepared by the President of the Board of Directors of your company in accordance with article L. 225-37 of the French Company Law for the year ended December 31, 2004.

It is for the President of the Board of Directors to give an account, in his report, notably of the conditions in which the tasks of the Board of Directors are prepared and organized and the internal control procedures in place within the company.

It is our responsibility to report to you our observations on the information set out in the President's report concerning the internal control procedures relating to the preparation and processing of financial and accounting information.

We performed our procedures in accordance with professional guidelines applicable in France. These require us to perform procedures to assess the fairness of the information set out in the President's report on the internal control procedures relating to the preparation and processing of financial and accounting information. These procedures notably consisted of:

• obtaining an understanding of the objectives and general organization of internal control, as well as the internal control procedures relating to the preparation and processing of financial and accounting information, as set out in the President's report;

• obtaining an understanding of the work performed to support the information given in the report.

On the basis of these procedures, we have no matters to report in connection with the information and the assertions given on the internal control procedures relating to the preparation and processing of financial and accounting information, contained in the report of the President of the Board of Directors, prepared in accordance with article L. 225-37 of the French Company Law.

Neuilly-sur-Seine and Courbevoie, March 10, 2005.

José-Luis Garcia Christian Mouillon

The Statutory Auditors

DELOITTE & ASSOCIES ERNST & YOUNG Audit

Consolidated financial statements

Consolidated balance sheet at December 31, 2004

Assets

In millions of euros at December 31	2004	2003	2002
Cash, due from central banks and post office accounts	5,206	6,755	5,090
Due from banks (Note 3)	66,114	60,282	54,354
Customer loans (Note 4)	209,839	193,547	184,769*
Lease financing and similar agreements (Note 5)	20,636	17,886*	17,351
Treasury notes and similar securities (Note 6)	41,082	30,610	28,010
Bonds and other debt securities (Note 6)	74,839	67,772	65,295
Shares and other equity securities (Note 6)	47,845	46,864	34,852
Treasury stock (short-term investment portfolio) (Note 6)	113	163	167
Investments of insurance companies (Note 7)	48,954	42,884	37,257
Investments in non consolidated subsidiaries and affiliates
and other long-term equity investments (Note 8)	4,660	5,274	6,267
Investments in subsidiaries and affiliates accounted for by the equity method	343	554	591
Tangible and intangible fixed assets (Note 9)	8,709	8,098*	5,740
Goodwill (Note 10)	2,106	2,150	2,154
Accruals, other accounts receivable and other assets (Note 11)	70,643	56,548	59,495

Total	601,089	539,387	501,392

Off-balance sheet items

In millions of euros at December 31	2004	2003	2002
Loan commitments granted (Note 19)	104,201	99,276*	91,122*
Guarantee commitments granted (Note 19)	50,309	46,336	44,590*
Commitments granted on securities	14,531	12,474	7,206
Foreign exchange transactions (Note 20)	407,096	318,862	349,409
Forward financial instrument commitments (Note 21)	6,855,946	5,546,999	5,187,753
Insurance commitments granted	338	354	342

* Amounts restated in relation to those given in 2002 and 2003 annual reports.

(The accompanying notes are an integral part of the consolidated financial statements).

Liabilities and shareholders' equity

In millions of euros at December 31	2004	2003	2002
Due to central banks and post office accounts	1,505	2,827	1,478
Due to banks (Note 12)	92,361	83,608	69,239
Customer deposits (Note 13)	213,433	196,090	196,085
Securitized debt payables (Note 14)	97,730	82,917	77,877
Underwriting reserves of insurance companies (Note 15)	46,828	41,164	35,760
Accruals, other accounts payable and other liabilities (Note 16)	111,246	97,726	87,767
Negative goodwill	–	1	–
Provisions for general risks and commitments (Note 17)	3,042	2,849	2,474*
Subordinated debt (Note 18)	11,930	10,945	11,199
General reserve for banking risks	284	312	207
Preferred shares	2,049	2,120	1,668
Minority interests	2,105	1,951	1,904
Shareholders' equity
Common stock	556	548	538
Additional paid-in capital	4,550	4,200	3,819
Treasury stock	(1,878)	(1,139)	(924)
Retained earnings	12,223	10,776	10,904
Net income	3,125	2,492	1,397
Sub-total	18,576	16,877	15,734
Total	601,089	539,387	501,392

Off-balance sheet items

In millions of euros at December 31	2004	2003	2002
Loan commitments received	3,726	6,346*	6,317*
Guarantee commitments received	41,661	34,898	33,723
Commitments received on securities	15,552	10,438	7,185
Foreign exchange transactions (Note 20)	408,846	321,435	351,801
Insurance commitments received	232	177	140

* Amounts restated in relation to those given in 2002 and 2003 annual reports.

(The accompanying notes are an integral part of the consolidated financial statements).

Consolidated income statement

In millions of euros at December 31	2004	2003	2002
Net interest income from:
Transactions with banks (Note 24)	(784)	(1,316)*	(1,224)
Transactions with customers (Note 25)	4,437	4,374	4,224
Bonds and other debt securities	1,127	1,064*	1,291
Other interest and similar revenues	(291)	295	102
Net income from lease financing and similar agreements (Note 26)	1,672	1,488	1,374
Sub-total	6,161	5,905	5,767
Dividend income (Note 27)	396	582	291
Dividends paid on preferred shares (Note 1)	(144)	(120)	(131)
Net interest and similar income	6,413	6,367	5,927
Net fee income (Note 28)	5,269	5,084	4,993*
Net income from financial transactions (Note 29)	4,217	3,710*	3,263
Other net operating income	517	476	390
Gross margin of insurance business (Note 30)	103	45	51
Net income from other activities (Note 31)	102	284	99
Net banking income	16,416	15,637	14,573
Personnel expenses (Note 32)	(6,603)	(6,323)	(6,179)*
Other operating expenses	(3,702)	(3,580)	(3,669)
Depreciation and amortization	(662)	(665)	(678)
Total operating expenses	(10,967)	(10,568)	(10,526)
Gross operating income	5,449	5,069	4,047
Cost of risk (Note 33)	(541)	(1,226)	(1,301)
Operating income	4,908	3,843	2,746
Net income from companies accounted for by the equity method (Note 34)	42	43	48
Net income from long-term investments (Note 35)	119	397	(299)
Earnings before exceptional items and tax	5,069	4,283	2,495
Exceptional items (Note 36)	(48)	(46)	(170)
Income tax (Note 37)	(1,398)	(1,161)	(649)
Amortization of goodwill	(186)	(217)	(184)
Allocation to reversal from the general reserve for banking risks	28	(104)	159
Net income before minority interests	3,465	2,755	1,651
Minority interests	(340)	(263)	(254)
Net income	3,125	2,492	1,397
Earnings per share in euros (1)	7.65	6.07	3.41
Diluted earning per share in euros (1)	7.59	6.02	3.41

* Amounts restated in relation to those given in 2002 and 2003 annual reports.

(1) Earnings per share (EPS) are calculated on the basis of the average number of outstanding shares over the financial year, after deducting treasury stock from shareholders' equity. Diluted EPS also takes into account the existence of stock options that have been awarded but not yet exercised.

(The accompanying notes are an integral part of consolidated financial statements).

Changes in shareholders' equity

	Common stock	Treasury		Revaluation and
	and additional	stock	Retained	reassessment	Shareholders'
In millions of euros	paid-in capital (1)	& assimilated (2)	earnings	reserves	equity
Balance at December 31, 2002	4,356	(924)	11,920	382	15,734
Increase in common stock (1)	321				321
Net income for the period			2,492		2,492
Dividends paid			(864)		(864)
Revaluation and reassessment reserves				(104)	(104)
Treasury stock (2)		(215)	18		(197)
Translation differences and other (3)	71		(576)		(505)
Balance at December 31, 2003	4,748	(1,139)	12,990	278	16,877
Increase in capital stock (1)	358				358
Net income for the period			3,125		3,125
Dividends paid			(1,031)		(1,031)
Revaluation and reassessment reserves				(15)	(15)
Treasury stock (2)		(739)	30		(709)
Translation differences and other (3)			(29)		(29)
Balance at December 31, 2004	5,106	(1,878)	15,085	263	18,576
		General

	Shareholders'	reserve for	Minority	Preferred	Total
In millions of euros	equity	banking risks (4)	interests	shares (5)	equity
Balance at December 31, 2002	15,734	207	1,904	1,668	19,513
Increase in capital stock (1)	321				321
Net income for the period	2,492		263		2,755
Dividends paid	(864)		(127)		(991)
Revaluation and reassessment reserves	(104)				(104)
Treasury stock (2)	(197)				(197)
Translation differences and other (3)	(505)	105	(89)	452	(37)
Balance at December 31, 2003	16,877	312	1,951	2,120	21,260
Increase in common stock (1)	358				358
Net income for the period	3,125		340		3,465
Dividends paid	(1,031)		(190)		(1,221)
Revaluation and reassessment reserves	(15)				(15)
Treasury stock (2)	(709)				(709)
Translation differences and other (3)	(29)	(28)	4	(71)	(124)
Balance at December 31, 2004	18,576	284	2,105	2,049	23,014

(1) At December 31, 2004, Société Générale's fully paid-up capital stock amounted to EUR 556,441,449 and was made up of 445,153,159 shares with a nominal value of EUR 1.25. During the year 2004, Société Générale carried out capital increases for a total amount of EUR 8.4 million, with EUR 349.2 million of additional paid-in capital, as follows: • EUR 6.5 million, with EUR 296.4 million of additional paid-in capital, was the result of

employees subscribing to shares under the Employee Share Ownership Plan; • EUR 1.9 million, with EUR 52.8 million of additional paid-in capital, resulted from the exercise by employees of options granted by the Board of Directors.

Goodwill on acquisitions that were financed by the conversion into shares of the convertible bonds issued in May 1993 were charged in 1998 against the additional capital arising on this capital increase, in proportion to the part of the total acquisition cost covered by the capital increase.

If the goodwill relating to these transactions had not been charged against shareholders' equity, it would have given rise to an amortization expense of EUR 10.5 million for the 2004 financial year.

It would have been booked on the assets side of the consolidated balance sheet for a net amount of EUR 46.5 million at December 31, 2004.

(2) Treasury stock held by Group companies at December 31, 2004 (36,990,431 shares; EUR 1,878 million) represented 8.31% of Société Générale's capital stock.

Société Générale bought back its own shares for a net amount (after deduction of disposals) of EUR 739 million.

Net capital gains on treasury stock in 2004 have been charged against the shareholders' equity for an amount of EUR 7.4 million. Dividend income on these shares (EUR 22.4 million) has been eliminated from consolidated income.

SOCIÉTÉ GÉNÉRALE GROUP - 2004 ANNUAL REPORT

(3) At December 31, 2004, currency translation differences related to foreign branches of Group banks and consolidated companies within the euro zone amounted to EUR (4) million. The variation in the currency translation difference at group level over the financial year 2004 was EUR (24) million, and can be attributed to the fall of the dollar against the euro in the amount of EUR (140) million and to the rise of the Czech Koruna in the amount of EUR 57 million. The gain on the disposal of Asia Credit Limited (reporting in Thai Baht) amounted to

EUR 38 million. The gain on the liquidation of BSGI (reporting in Indonesian Rupees) amounted to EUR 53 million.

(4) A reversal of EUR 45.6 million was made in 2003 from the General Reserve for Banking Risks and of EUR 28 million in 2004. An allocation of EUR 150 million was also made to the general reserve over the 2003 financial year (see Note 1).

(5) In 1997, Société Générale issued USD 800 million of preferred shares in the United States through its subsidiary SocGen Real Estate Company LLC.

Société Générale repeated this operation in 2000 by issuing EUR 500 million of preferred shares through its subsidiary SG Capital Trust, and in 2001 by issuing USD 425 million through SG Americas.

In 2003, Société Générale issued a further EUR 650 million of preferred shares in the United States through its subsidiary SG Capital Trust III.

These preferred shares are included in Tier-one capital for the purpose of determining Société Générale's prudential ratios.

Notes to the consolidated financial statements

Note 1 Significant accounting principles

The consolidated accounts of the Société Générale Group for the 2004 financial year have been drawn up in accordance with the provisions of Regulation No. 99-07 of the French Accounting Regulation Committee (Comité de la réglementation comptable) on the consolidation rules applicable to companies that come under the French Banking and Finance Regulation Committee (Comité de la réglementation bancaire et financière).

The presentation of the financial statements complies with the provisions of Regulation No. 2000-04 of the French Accounting Regulation Committee concerning consolidated financial statements produced by companies that come under the French Banking and Finance Regulation Committee.

Income and expenses booked on the income statement are classified by type of instrument rather than by purpose.

The consolidated financial statements of Société Générale include the financial statements of the Parent Company and of the French and foreign companies making up the Group. Since the financial statements of foreign subsidiaries are prepared using accounting principles generally accepted in their respective countries, any necessary restatements and adjustments are made prior to consolidation so that they comply with the accounting principles used by Société Générale.

Consolidation principles

Consolidation methods

The consolidated financial statements include the financial statements of Société Générale and of all significant subsidiaries over which Société Générale exercises control. Companies with a fiscal year ending more than three months before or after that of Société Générale prepare pro-forma statements for a twelve-month period ended December 31.

The following consolidation methods are used:

Full consolidation

This method of consolidation applies to companies over which Société Générale exercises sole control and which are involved in banking and finance activities, or activities directly linked to the same (insurance, property development, computer equipment leasing, vehicle leasing, oil trading).

Sole control over a subsidiary is defined as the power to dictate the financial and operational policies of the said subsidiary so as to obtain benefits from its activities. It is achieved:

• either by directly or indirectly holding the majority of voting rights in the subsidiary;

• or by appointing for two successive financial years the majority of the members of the board of directors, executive committee or supervisory board of the subsidiary; the Group is assumed to have appointed the said majority when it has held directly or indirectly during this period over 40% of the voting rights in the said subsidiary and no other partner or shareholder has held directly or indirectly a proportion of the voting rights greater than its own;

• or by the ability to exercise a controlling influence over a subsidiary under the terms and conditions of a contract or in accordance with the subsidiary's bylaws, when the applicable law allows the same and the Group is a shareholder in or partner of the said subsidiary; controlling influence is understood to exist as soon as the Group has the possibility to draw on or decide on the use of the assets, liabilities and off-balance sheet items of the said subsidiary in the same way that it can make use of these items in subsidiaries under its sole control. In the absence of such contracts or bylaws, controlling influence over a credit institution or investment company is also assumed to exist when the Group holds at least 20% of the voting rights and no other shareholder or group of shareholders holds a proportion of the voting rights greater than its own.

However, only companies which make a significant contribution to the Parent Company accounts, and in particular those companies with total assets in excess of 0.02% of total Group assets or in which the shareholders' equity held by the Group is in excess of 0.10% of Parent Company shareholders' equity, are fully consolidated.

Proportionate consolidation

Companies over which the Group exercises joint control are consolidated by the proportionate method.

Joint control exists when control over a subsidiary run jointly by a limited number of partners or shareholders is shared in such a way that the financial and operating policies of the said subsidiary are determined by mutual agreement.

A contractual agreement must require the consent of all partners or shareholders for exercising control over the economic activity of the said subsidiary and taking any strategic decisions.

Equity Method

Companies over which the Group exercises significant influence are accounted for by the equity method. Significant influence is the power to influence the financial and operating policies of a subsidiary without exercising control over the said subsidiary. In particular, significant influence can result from Société Générale being represented on the board of directors or supervisory board, from involvement in strategic decisions, from the existence of significant intercompany transactions, from the exchange of management staff, or from the company's technical dependency on Société Générale. The Group is assumed to exercise significant influence over the financial and operating policies of a subsidiary when it holds directly or indirectly at least 20% of the voting rights in this subsidiary.

However, only companies in which Société Générale's share of the net worth exceeds 0.10% of Parent Company shareholders' equity, are consolidated by the equity method.

Specific treatment for special purpose vehicles

The independent legal entities ("special purpose vehicles") that are set up specifically to manage a transaction or group of similar transactions are consolidated whenever they are substantially controlled by the Group particularly by virtue of contracts, agreements or statutory clauses, even in cases where the Group holds none of the capital in the entities.

Regulation No. 99-07 of the French Accounting Regulation Committee defines three criteria that must be considered in order to determine the existence of such a control, but states that each of them taken independently is not sufficient to prove the control. These three criteria are:

• the decision-making power, accompanied or not by the management power, over the ordinary activities of the entity or over its assets, whether this power is effectively exercised or not;

• the ability to receive the majority of the entity's economic benefits;
• the exposure to the majority of the risks related to the entity.

The existence of an "autopilot" mechanism does not presuppose effective control.

The in-substance appreciation of the decision making power criteria is decisive for determining the consolidation of special purpose vehicles involved in securitization transactions carried out for the Group's needs, notably securitization vehicles (fonds communs de créances) set up under the provisions of the French financial and monetary code and similar foreign entities set up under the provisions of a regulation providing guarantees equivalent to those existing in France.

The French Securities and Exchange Commission (Commission des Opérations de Bourse) and the French Banking Commission (Commission Bancaire) issued a joint opinion at the end of 2002 setting out their interpretation of the aforementioned regulatory provisions. Further to this opinion, two special purpose vehicles dedicated to arbitrage transactions were consolidated in the Group's accounts as of the fourth quarter of 2002, even though they only meet one of the three criteria given in Regulation No. 99-07. One of these vehicles has ceased its activities and was excluded from the consolidation scope during the fourth quarter of 2004.

Translation of foreign currency financial statements

The on- and off-balance sheet items of consolidated companies reporting in foreign currencies are translated at the official exchange rates prevailing at year-end. Income statement items of these companies are translated at average exchange rates for the year. Gains and losses arising from the translation of capital, reserves, retained earnings and income are included in shareholders' equity under Translation differences. Gains and losses on transactions used to hedge net investments in foreign consolidated entities or their income in foreign currencies, along with gains and losses arising from the translation of the capital contribution of foreign branches of Group banks are also included in shareholders' equity under the same heading.

In accordance with Recommendation 98-01 of the French National Accounting Standards Board (Conseil national de la comptabilité), translation differences relating to subsidiaries and branches in the euro zone are retained in shareholders' equity.

Following the first time adoption of IFRS in consolidated accounts since January 1, 2005, the cumulative translation differences will be offset against consolidated retained earnings and deemed to be zero at the date of transition - January 1, 2004. Consequently, the translation differences as measured at December 31, 2004 will be excluded from gains or losses on subsequent disposals of foreign consolidated entities.

The financial statements of companies operating in countries with high inflation are restated to reflect the value of their currency at yearend. The corresponding gain or loss on the net monetary assets of these companies is included in the determination of net income, while gains or losses on net non-monetary assets are included in shareholders' equity. Balance sheet, off-balance sheet and income statement items, restated as described above, are translated at the official exchange rate at closing of the accounts.

Significant adjustments made for consolidation

The main restatements made in drawing up the consolidated accounts are as follows:

Treatment of acquisitions and goodwill

The difference between the purchase price and the share of net assets acquired is allocated in the first instance to identified on- and off-balance sheet items. The analyses and appraisals required to establish the initial valuation of these items, together with any subsequent adjustments made in the light of new information, can be made at any time up to the closing of the first full financial year following the acquisition. Any changes made to the posting values of the identified items are charged against the gross goodwill and the corresponding accrued amortization expenses are adjusted accordingly.

For each acquisition, the balance of non-allocated differences is recorded in the balance sheet under Goodwill as an asset or a liability, depending on its arithmetical value. Goodwill is recorded in the local currency of the acquired entity, and translated at the official exchange rate at closing of the accounts. Positive goodwill is amortized and negative goodwill is recognized in income according to a predefined plan over a set period according to the activity of the acquired company, the stability of its business portfolio and its teams, and according to the assumptions used and objectives set at the time of each acquisition. This period cannot in any event exceed 20 years. Goodwill is subject to a regular review based on analyses using multiple criteria similar to those employed during the initial valuation of the acquired companies. The parameters used in the valuations, such as discounted cash flow, earnings multiples, comparable valuations in recent transactions, market shares or assets under management, vary depending on the business concerned. Once this review is completed, an exceptional amortization expense is booked in the event that significant unfavorable changes have affected the elements used to calculate the amortization schedule.

The goodwill booked on acquisitions made before January 1, 2000 and financed through capital increases is charged against the additional paid-in capital, in proportion to the part of the total purchase price covered by the capital increase. Regulation 99-07 no longer permits this method to be applied as of January 1, 2000 but does not oblige a retroactive restatement of transactions concluded before this date.

In the event of the full or partial disposal of companies acquired in this way, the corresponding goodwill, which was originally charged against capital, is used to adjust the capital gain or loss on disposal on the consolidated income statement, after deducting any amortization that should have been booked up to the date of disposal if this goodwill had been kept on the assets side of the consolidated balance sheet.

The tax gains generated as a result of the amortization of this goodwill are similarly charged against capital provided they are tax deductible.

Revaluation reserves

This caption includes differences which arise from:

• the statutory asset revaluations carried out in France in 1977 and 1978;

• restructuring operations and intercompany transfers of assets carried out before December 31, 1991.

Revaluation reserves resulting from intercompany profits on transfers of fixed assets subject to depreciation are recognized on the income statement in proportion to the additional depreciation booked by the company acquiring the asset.

Similarly, when such assets are sold on to third parties, the corresponding share of the revaluation reserve is credited to income. As a consequence, the profit or loss on disposal is determined by reference to the historical cost of the assets (less depreciation and allowances, which are themselves determined by reference to historical cost).

Reassessment reserves

Intercompany transfers involving most of Société Générale's offices and other premises took place during 1992. These assets, which were previously held by the Parent Company and certain real estate subsidiaries, were transferred to wholly-owned subsidiaries which are included in the tax consolidation.

Capital gains recorded by the contributing companies in their nonconsolidated financial statements were eliminated for the determination of consolidated net income. These gains, net of the related deferred taxation, are included in Reassessment reserves in accordance with Directive 91-06 of the French Banking Commission (Commission Bancaire).

The reassessment reserve is recorded in accordance with the same principles as those described above for revaluation reserves. Société Générale's proprietary real estate assets were written down in line with current market values, and the provisions were first charged against reassessment reserves, reversing the accounting treatment used in 1992. Deferred taxes relating to these residual reserves were adjusted accordingly.

Deferred taxes

Deferred taxes resulting from consolidation adjustments are determined separately for each taxable entity, by reference to its own tax position.

Full consolidation of insurance companies

The Group applies the provisions of Regulation No. 2000-05 of the French Accounting Regulation Committee on the consolidation rules applicable to companies governed by the Insurance Code.

The specific accounting regulations applied for insurance activities are maintained in the Group's consolidated accounts.

Decree 2002-970 dated July 4, 2002 modified the Insurance Code, further specifying certain rules relating to the use of forward instruments by French insurance companies. This decree was accompanied by the publication on December 12, 2002 of Regulation No. 2002-09 of the French Accounting Regulation Committee which defines the accounting rules to be used by French insurance companies as of January 1, 2003. The consequences of these new texts were treated as a change in accounting methodology; its impact on the consolidated opening net worth was recorded under shareholder's equity in 2003 for an amount of EUR 8 million.

The constituent items of insurance companies that are consolidated by either the full or proportionate method are presented under the same heading on the consolidated balance sheet, off-balance sheet and income statement, with the exception of the following items, which are posted in distinct rows in the consolidated financial statements:

■ Net investments of insurance companies

The investments of insurance companies include investments held to guarantee unit-linked policies, as well as other investments made to back life insurance policies and other insurance policies. Investments in the form of securities issued by companies consolidated in the Parent Company accounts are eliminated.

Investments held to guarantee unit-linked policies are marked to market; the total value of these securities corresponds to the total insurance liabilities.

Property investments are recorded at their purchase price, less acquisition costs and taxes, and inclusive of the cost of any building or renovation work; buildings are depreciated using the straight-line method over their estimated economic life. A provision for depreciation is booked in the event of a lasting and significant fall in the value of the buildings.

Bonds and other debt securities are stated at cost, exclusive of accrued interest and acquisition costs. If the redemption value of the security differs from the purchase price, the difference for each line of securities is amortized to income using an actuarial method over the term to maturity of these securities. A provision for depreciation is booked if there is a risk that the debtors will be unable to repay the principal or honor the interest payments.

Shares and other equity securities are booked at their purchase price, exclusive of costs. A provision for depreciation is booked in the event of a sustained fall in the value of the securities as determined on the basis of the estimated recoverable value.

Provisions for early redemption risk in the individual accounts of insurance companies are intended to cover the risk of insufficient investment liquidity in the event of a change in the claims experience. They serve to cover the risk of realizing capital losses on securities that come under article R. 332-20 of the Insurance Code (principally shares, units in undertakings for collective investment in transferable securities and buildings), when such risk is not covered by an other provision. Following an analysis of these provisions in compliance with notice No. 2004-B of the French National Accounting Standards Board's Emergency Committee, published on January 21, 2004, they were written back in 2003. Consequently, the new Regulation No. 2004-10 of the French Accounting Regulation Committee, specifying the elimination of provisions for early redemption risk in the consolidated accounts, had no impact on the accounts for 2004.

■ Underwriting reserves of insurance companies

Underwriting reserves correspond to the commitments of insurance companies with respect to insured persons and the beneficiaries of policies.

Notes to the consolidated financial statements

Underwriting reserves for unit-linked policies are valued at the end of the financial year on the basis of the market value of the assets underlying these policies.

Life insurance underwriting reserves principally comprise mathematical reserves, which correspond to the difference between the current value of commitments respectively made by the insurer and insured persons, and reserves for outstanding losses.

Non-life insurance underwriting reserves comprise provisions for unearned premiums (share of premium income relating to following financial years) and for outstanding losses.

■ Gross margin of insurance businesses

The banking account classification by type of income and expense item is used in place of the insurance companies' classification by destination. The item Gross margin of insurance businesses is made up of the following technical income and expense items, after reclassification by type of other technical income and expense items and elimination of intercompany items: premiums or contributions that are earned, paid or accrued, cost of benefits, net of disposals and retrocessions, including fluctuations in reserves and net income from allocated investments.

Accounting principles and valuation methods

In accordance with accounting principles applicable to French banks, the majority of transactions are recorded using valuation methods which take into account the purpose for which they were made.

In financial intermediation transactions, assets and liabilities are carried at historical cost, and provisions are booked where counterparty risks arise. Revenues and expenses arising from these transactions are recorded over the life of the transaction in accordance with the time period concept. Transactions on financial futures carried out for hedging purposes or to manage the bank's overall interest rate risk are accounted for using the same principles.

Trading transactions are generally marked to market at year-end, except for loans, borrowings and short-term investment securities, which are recorded at their face value (see below). When instruments are traded on illiquid markets, the market value used is reduced for reasons of prudence. Moreover, a provision for risks is booked to cover valuations established on the basis of in-house models (Reserve Policy), which is determined according to the complexity of the model used and the life of the financial instrument.

Amounts due from banks, customer loans, guarantees and endorsements

Amounts due from banks and customer loans are classified according to their initial duration and type into: demand deposits (current accounts and overnight transactions) and term deposits in the case of banks; and commercial loans, overdrafts and other loans in the case of customers. They also include securities purchased from banks and customers under resale agreements and loans secured by notes and securities.

Only amounts due and customer loans which meet the following criteria are offset on the balance sheet: those with the same counterparty, due date, currency, and accounting entity, and those for which an agreement exists with the counterparty allowing the Group to combine the accounts and exercise the right of offset.

Interest accrued on these receivables is recorded with these assets as Related receivables.

Guarantees and endorsements booked off-balance sheet represent transactions which have not yet given rise to cash movements, such as irrevocable commitments for the undrawn portion of facilities made available to banks and customers or guarantees given on their behalf.

Regulation No. 2002-03 of the French Accounting Regulation Committee relating to the accounting treatment of credit risks in companies governed by the Banking and Finance Regulation Committee and published on December 12, 2002 is applicable as of January 1, 2003. This new regulation specifies the conditions for the classification of doubtful loans in the balance sheet and the treatment of restructured loans then bearing an off-market interest rate.

If a commitment carries an identified credit risk which makes it probable that the Group will not recover all or part of the amounts due under the counterparty's commitment in accordance with the original conditions of the contract, despite the existence of a guarantee, the related outstanding loan is classified as a doubtful loan if one or more payments are more than three months overdue (six months in the case of real estate loans and nine months for loans to local authorities), or, regardless of whether any payments have been missed if it can be assumed that there is an identified risk, or if legal proceedings have been started.

If a loan to a given borrower is classified as doubtful, all outstanding loans or commitments for that borrower are reclassified as doubtful, regardless of whether or not they are backed by a guarantee.

Provisions for doubtful loans are booked for doubtful loans or for risks in the amount of the probable losses. Furthermore, interest on doubtful loans is fully provisioned for. Provisions, write-backs of provisions, losses on bad debts and recovery of depreciated debts are booked under Cost of risk, except for net provisions for interest on doubtful loans which are booked under Net Banking Income.

Doubtful loans can be reclassified as performing loans when regular repayments have been resumed according to the original terms of the contract. Similarly, doubtful loans which have been restructured can be reclassified as performing loans. If the loans have been restructured under off-market conditions, the difference between the new conditions and the lesser of market conditions and original ones must be booked under Cost of risk when the loan is restructured then reincorporated into net interest income for the remaining term of the loan. When a borrower's solvency is such that even after the loan has been classified as doubtful for a reasonable period, it is not foreseeable that it will be reclassified as a performing loan, the loan is identified as a non-performing loan. A loan is classified as non-performing in the event of an early termination of the contract and in any case one year after it was classified as doubtful, except when the original clauses of the contract have been respected or when the loan is covered by guarantees which ensure its recovery. Loans which have been restructured and for which the borrower has not respected the new conditions are also classified as non-performing.

The provisions booked on loans made to the real estate industry (and all real estate assets) are valued on the basis of the type of program involved as follows:

Real estate development and major renovation projects

Provisions are made based on regularly revised estimates of losses on completion, which take into account market prices and the time necessary for constructing and/or selling the property, as observed in the market for new property.

Completed buildings

Completed buildings are valued based on the rental yield, or their market value determined when necessary on the basis of expert appraisals.

Lease financing and similar agreements

This item includes financing leases, lease-purchase agreements, and similar agreements under which the lessor does not intend to keep the asset at the end of the lease.

Fixed assets under pure rental agreements are booked with nonoperating assets in the account Tangible and intangible fixed assets.

Assets subject to financing leases, lease-purchase agreements and similar agreements are carried on the consolidated balance sheet at their financial value, that is, total future lease rentals receivable, less the interest included in these rentals. These amounts are substituted for those determined for tax purposes, and the difference, net of deferred taxes, is included in the consolidated reserves.

Interest accrued included in rentals not yet due is recorded with the underlying assets as related receivables. Provisions are booked for doubtful financing leases and similar agreements in the same manner as amounts due from banks and customer loans.

The acquisition cost of assets leased under operational leases is amortized on a straight-line basis over the life of the contract; similarly, all rebates granted by suppliers on the purchase price of the leased assets (volume discount) are recorded as deferred income and spread out over the life of the contracts. The accounting treatment of income invoiced for maintenance services provided in connection with leasing activities aims to show a constant margin on these products in relation to the expenses incurred, over the duration of the leasing contract. The harmonization of the models used within the Group to calculate income to be deferred under this treatment resulted in a change in this estimate. The impact of this change was recognized in the form of an Exceptional loss of EUR 20 million in the first quarter of 2004, and the deferred tax income relative to this expense was booked under Income tax in the amount of EUR 7 million.

Securities portfolio

Securities are classified according to:

• their type: public notes (Treasury notes and similar securities), bonds and other debt securities (negotiable debt instruments, interbank certificates), shares and other equity securities;

• the purpose for which they were acquired: trading, short-term and long-term investment, shares intended for portfolio activity, investments in non-consolidated subsidiaries and affiliates, and other longterm equity investments. All securities in each category are accounted for using similar methods, as follows:

Trading securities

Trading securities are securities for which a liquid market exists and that are acquired with a view to rapid resale (within a maximum period of six months). They also include liquid securities that are held for a period of over six months in the context of market-making activities or in relation to a hedging or arbitrage transaction. They are valued at market price at year-end. Net unrealized gains or losses, together with net gains or losses on disposals, are recognized on the income statement under Net income from financial transactions. Coupon payments received on fixed-income securities in the trading portfolio are recorded on the income statement in the account Net interest income from bonds and other debt securities.

Short-term investment securities

Short-term investment securities are all those intended to be held for more than six months, except for those classified as long-term investment securities (see below).

■ Shares and other equity securities

Equity securities are carried on the balance sheet at cost excluding acquisition expenses, or at contribution value. At year-end, cost is compared to realizable value. For listed securities, realizable value is defined as the most recent market price. Unrealized capital gains are not recognized in the accounts but a provision for depreciation of portfolio securities is booked to cover unrealized capital losses, without the said provision being offset against any unrealized capital gains. Income from these securities is recorded in Dividend income.

■ Bonds and other debt securities

These securities are carried at cost excluding acquisition expenses and, in the case of bonds, excluding interest accrued and not yet due at the date of purchase. The positive or negative difference between cost and redemption value is amortized to income over the life of the securities concerned. Accrued interest receivable on these securities is recorded with the underlying assets as Related receivables. Income from these securities is included in Net interest income from bonds and other debt securities.

At year-end, cost is compared to realizable value or, in the case of listed securities, to their most recent market price. Unrealized capital gains are not recognized in the accounts but a provision for depreciation of portfolio securities is booked to cover unrealized capital losses, after consideration of gains made on any related hedging transactions.

Allocations to and reversals of provisions for losses on short-term investment securities together with gains and losses on sales of these securities are recorded under Net income from financial transactions on the consolidated income statement.

Long-term investment securities

Long-term investment securities are debt securities held by the Group, which intends to hold them on a long-term basis, in principle until maturity, and where the Group has the necessary means to:

• either permanently hedge its position against a possible depreciation in the securities due to interest rate fluctuations, using interest rate futures;

• or hold the securities on a long-term basis by obtaining funds, including available capital, which are matched and used to finance these securities.

When the interest rate or liquidity matching no longer complies with the regulations set by the French Banking Commission, the securities are reclassified as short-term investment securities.

Long-term investment securities are booked using the same principles as those applied to short-term investment securities, except that no provision is made for unrealized losses, unless there is a strong probability that the securities will be sold in the short term, or unless there is a risk that the issuer will be unable to redeem them.

Allocations to and reversals of provisions for losses on long-term investment securities, together with gains and losses on sales of these securities, are recorded under Net income from long-term investments on the consolidated income statement.

Shares intended for portfolio activity

This category of securities covers investments made on a regular basis with the sole aim of realizing a capital gain in the medium term and without the intention of making a long-term investment in the development of the issuing company's business, nor of participating actively in its operational management. The profitability of these investments results principally from the capital gains realized on disposal. This activity is carried out on a significant and ongoing basis through ad hoc subsidiaries or structures. This category notably includes shares held in the context of venture capital activities.

These securities are recognized on the balance sheet at their purchase price, less acquisition costs. At the closing of the financial year, they are valued at their value in use determined on the basis of the issuing company's general development prospects and the remainder of the investment horizon (for listed companies, the average share price over the last three months is considered as representative of the value in use). Unrealized capital gains are not recognized in the accounts but a provision for depreciation of portfolio securities is booked to cover unrealized capital losses, without the said provision being offset against any unrealized capital gains. Allocations to and reversals of provisions for depreciation, as well as any capital gains or losses realized on the disposal of these securities, including any profit or loss generated when tendering these securities to public share exchange offers, are booked under Net income from financial transactions.

Investments in non-consolidated subsidiaries and affiliates, and other long-term equity investments

This category of securities covers shares held in non-consolidated subsidiaries and affiliates, when it is deemed useful to the business of the company to hold the said shares in the long term. This notably covers investments that meet the following criteria:

• shares in companies that share directors or senior managers with the holding company, under circumstances where an influence can be exercised over the company in which the shares are held;

• shares in companies that belong to the same group controlled by individuals or legal entities, where the said persons or entities exercise control over the group and ensure that decisions are taken in unison; • shares representing more than 10% of the voting rights in the capital issued by a credit institution or a company whose business is directly linked to that of the Group.

This category also includes other long-term equity investments, comprising equity investments made by the Group with the aim of developing ongoing professional relations by creating a privileged link with the issuing company but without exercising any influence on the management of companies in which shares are held due to the low proportion of attached voting rights.

Investments in non-consolidated subsidiaries and affiliates, and other long-term equity investments are recorded at their purchase price exclusive of acquisition costs, or in the case of securities subject to a revaluation as described above under Revaluation reserves, at their new value. Dividend income earned on these securities is booked on the income statement under Dividend income.

At closing of the financial year, investments in non-consolidated subsidiaries and affiliates are valued at their value in use, representing the price the company would accept to pay to obtain the said securities if it had to acquire them in view of its investment objective. This value is estimated on the basis of various criteria, such as shareholders' equity, profitability, and the average share price over the last three months. Unrealized capital gains are not recognized in the accounts but a provision for depreciation of portfolio securities is booked to cover unrealized capital losses. Allocations to and reversals of provisions for depreciation, as well as any capital gains or losses realized on the disposal of these securities, including any profit or loss generated when tendering such securities to public share exchange offers, are booked under Net income from long-term investments.

Premises, equipment and other fixed assets

Premises, equipment and other fixed assets are carried at their purchase price or, in the case of investments which have been revalued as described above under Revaluation reserves, at the revalued amounts.

Software developed internally is recorded on the asset side of the balance sheet in the amount of the direct cost of development, which includes expenditure on hardware and services and personnel expenses which can be attributed directly to the production and preparation of the asset for use.

Notes to the consolidated financial statements

In general, depreciation is calculated using the straight-line or diminishing balance method over the estimated useful life of the asset, as follows:

Buildings	20-35 years
Improvements	10 years
Office equipment and furniture	10 years
Other equipment and vehicles	4-5 years
Software	3-5 years

This item includes assets leased under pure rental agreements.

Regulation No. 2002-10 of the French Accounting Regulation Committee relating to the amortization and depreciation of assets will only apply to accounts for financial years beginning after January 1, 2005. However, as of January 1, 2003, in accordance with the transitional provisions specified in article 15 of the regulation and in the terms of notice No. 2003-F of the French National Accounting Board's Emergency Committee, expenditure for major repairs on fixed assets is booked as provisions for risks and charges on a straight-line basis over the period between successive major repairs. These expenditures, which must be specified in major maintenance programmes which are designed exclusively for the upkeep of the fixed assets in question and not to extend their lifetime beyond that which was initially defined, are limited within the Group to renovation work on the façades of buildings. The effect of the change in accounting methods on net worth at January 1, 2003 was booked under capital in the amount of EUR 3 million, net of tax.

Amounts due to banks, customer deposits

Amounts due to banks and customer deposits are classified according to their initial duration and type into: demand (demand deposits and current accounts) and time deposits and borrowings in the case of banks; and into regulated savings accounts and other deposits in the case of customers. They also include securities sold to banks and customers under repurchase agreements.

Interest accrued on these deposits is recorded with these liabilities as Related payables.

Securitized debt payables

These liabilities are classified by type of security: loan notes, interbank market certificates, negotiable debt instruments, bonds and other debt securities; but exclude subordinated notes which are classified under Subordinated debt.

Interest accrued is recorded with the underlying liabilities as Related payables. Bond issuance and redemption premiums are amortized using the straight-line or actuarial method over the life of the related borrowings. The resulting expense is recorded in Net interest income from bonds and other debt securities.

Bond issuance costs are deferred and amortized on a straight-line basis over the life of the bonds. The corresponding amortization expense is booked on the income statement under Net interest income from other interest and similar revenues.

Subordinated debt

This item includes all dated or undated borrowings, whether or not in the form of securitized debt, which in the case of liquidation of the borrowing company may only be redeemed after all other creditors have been paid.

Interest accrued and payable in respect of long-term subordinated debt, if any, is shown with the underlying liabilities as Related payables.

Provisions for general risks and commitments

These provisions include:

• provisions for country risks, which are made on a lump-sum basis based on estimates by Société Générale of its risks on the related countries and on debtors located in these countries at the balance sheet date, using criteria such as estimates of the country's economic, financial, social and political situation, or the discount rate on the secondary market;

• provisions for commitments;
• provisions for contingencies and disputes.

A description of contingencies and disputes is provided in the Risk Management report.

Provisions for contingencies and disputes are defined as liabilities without a precisely defined amount or due date. Their recording is subordinated to the existence of an obligation of the entity towards a third party that will probably or necessarily lead to a transfer of funds to the third party, without compensation for at least an equivalent amount being expected from this third party.

A provision had been booked at December 31, 1999 for the costs relating to the second stage of the introduction of the euro in 2002 and had been readjusted on December 31, 2000 and December 31, 2001. In accordance with the recommendation made by the French National Accounting Standards Board, this charge related to additional expenses to be incurred as a result of this change over the period 2001 through 2002. On December 31, 2002, this provision was fully reversed.

Regulation No. 99-06 of the French Banking Regulation Committee defines the funds necessary for the deposit guarantee fund. These resources comprise certificates of association acquired by each entity, together with annual subscription fees. Regulation No. 99-08 of the same Committee set the total amount of these subscription fees, which were payable over the period 1999 through 2002 in order to endow the fund. Half of the said fees were paid in the form of guarantee deposits. Certificates of association and guarantee deposits are booked on the balance sheet under Other sundry debtors. A provision was booked at the end of 1999 under Exceptional items for all subscription fees to be paid by Group companies over the 2000-2002 period for the initial endowment of the guarantee fund. Subsequent fees were booked under Other operating expenses.

A provision is booked to cover stock options or shares allocated to employees at year-end, for an amount determined on the basis of the value of the underlying securities and booked under Personnel expenses.

Société Générale signed an early retirement agreement which came into force on January 1, 2002 and will be applicable until March 31, 2006. A provision was booked on the basis of the cost attached to employees who were granted early retirement.

General reserve for banking risks

In accordance with Regulations 90-02 and 92-05 of the French Banking Regulation Committee, a general reserve for banking risks was set up in 1993 via a transfer from the general reserve for country risks, net of related deferred taxes. Additional allocations were made to this fund in 1996 and 2003.

During the 2002, 2003 and 2004 financial years, SG Cowen recorded charges and exceptional provisions intended to cover the various consequences of a fraud committed over a period of ten years, which affected the former retail brokerage activity of this company. This activity was acquired with Cowen & Company in 1998 and was subsequently sold in 2000. Insofar as this fraud does not relate to the day-to-day management of one of the Group's operating activities but instead to a business that has since been sold and essentially concerns a period prior to the Group's acquisition of the business, these charges were booked under exceptional items. In light of the nature of these charges, a reversal was made from the general reserve for banking risks in the same amount in 2002, 2003 and 2004.

Preferred shares

In the second half of 1997, Société Générale issued USD 800 million in preferred securities through a wholly-owned US subsidiary. These non-voting securities are entitled to a fixed non-cumulative dividend equal to 7.64% of nominal value. This dividend is payable semi-annually by decision of the subsidiary's Board of Directors.

In the first half of 2000, Société Générale issued EUR 500 million in preferred securities through a wholly-owned US subsidiary. These securities are entitled to a fixed non-cumulative dividend equal to 7.875% of nominal value payable annually, with a step-up clause that comes into effect after 10 years.

In the fourth quarter of 2001, Société Générale issued USD 425 million in preferred securities through a wholly-owned US subsidiary. These securities are entitled to a non-cumulative dividend payable quarterly (USD 335 million paying a fixed rate of 6.302% and USD 90 million paying a variable rate of Libor + 0.92%), with a step-up clause that comes into effect after 10 years.

In the fourth quarter of 2003, Société Générale issued EUR 650 million of preferred shares through a wholly-owned US subsidiary (paying a non-cumulative dividend of 5.419% annually) with a step-up clause that comes into effect after 10 years.

Dividend income is charged to the item Dividends paid on preferred shares. Preferred securities are included in Tier-one capital for the purpose of determining Société Générale's prudential ratios.

Treasury stock

In accordance with the provisions of Recommendation No. 2000-05 of the French National Accounting Standards Board relating to the recognition in the accounts of treasury stock held by companies governed by the French Banking and Finance Regulation Committee, Société Générale shares acquired by the Group with a view to allocating the same to employees are booked as short-term investment securities (treasury stock) on the assets side of the balance sheet.

Société Générale shares held with a view to underpinning the share price or as part of arbitrage transactions on the CAC 40 index are booked under trading securities

Other Société Générale shares, and in particular those held by certain Group companies for purposes of control or cancellation, are deducted from capital and reserves for the determination of shareholders' equity.

Transactions denominated in foreign currencies

Gains and losses arising from ordinary activities in foreign currencies are booked on the income statement. In accordance with Regulation 89-01 of the French Banking Regulation Committee, outright forward foreign exchange transactions and those used to hedge other forward foreign exchange transactions are valued on the basis of the forward foreign exchange rate of the currency involved for the remaining maturity. Spot and other forward foreign exchange positions are revalued on a monthly basis using official month-end spot rates. Unrealized gains and losses are recognized on the income statement. Premiums and discounts resulting from hedged forward foreign exchange transactions, as defined by article 9 of the above-mentioned regulation, are amortized to income on a straight-line basis over the remaining term to maturity of these transactions.

Forward financial instruments

Forward financial instruments relating to interest rates, foreign exchange or equities are used for trading and hedging purposes and are accounted for in compliance with Regulations 88-02 and 92-04 of the French Banking Regulation Committee and Directive 88-01 of the French Banking Commission. Nominal commitments on forward financial instruments are posted as one off-balance sheet item. The nominal contract value represents the volume of outstanding transactions and does not represent the potential for gain or loss associated with the market or counterparty risk on such transactions.

Credit derivatives purchased to hedge credit risks on financial assets which are not valued at market value are classified and treated as guarantee commitments received.

Accounting income or expense on these forward financial instruments depends on the purpose for which the transaction was concluded, as follows:

Hedging transactions

Revenues and expenses on forward financial instruments used as a hedge, and assigned from the beginning to an identifiable item or group of similar items, are recognized in the income statement in the same manner as revenues and expenses on the hedged item. Revenues and expenses on interest rate instruments are booked as net interest income in the same interest income or expense account as the items hedged. Revenues and expenses on other instruments such as equity securities, stock market indexes or foreign exchange are booked as net income from financial transactions in the account Net income from forward financial instruments.

Revenues and expenses on forward financial instruments used to hedge or manage an overall interest rate risk are recognized in the income statement over the life of the instrument as net income from financial transactions in the account Net income from forward financial instruments.

Trading transactions

Trading transactions include instruments traded on organized or similar markets and other instruments, such as credit derivatives and composite option products, which are included in the trading portfolio although they are traded over-the-counter on less liquid markets, together with debt securities with a forward financial instrument component, as soon as this classification in the accounts most appropriately reflects the results and associated risks. Trading transactions are marked to market at year-end; in the absence of a liquid market, this value is generally determined on the basis of in-house models. Where necessary, these valuations are adjusted for reasons of prudence by applying a discount (Reserve Policy). This discount is determined on the basis of the instruments concerned and the associated risks, and takes into account:

• a prudential valuation of all the instruments, regardless of the liquidity of the corresponding market;

• a reserve calculated according to the size of the position and intended to cover the risk that the Group will be unable to liquidate the investment in one go due to the size of the holding;

• an adjustment for the reduced liquidity of instruments and modeling risks in the case of complex products, as well as transactions on less liquid markets (less liquid since they have developed recently or are more specialized).

Furthermore, for over-the-counter transactions on forward interest rate instruments, the market value recognizes counterparty risks and the discounted value of future management costs.

The corresponding gains or losses are directly booked as income for the period, regardless of whether they are realized or unrealized. They are recognized on the income statement as Net income from financial transactions.

Gains or losses corresponding to contracts concluded within the scope of cash management activities managed by the trading room, in order to benefit from any interest rate fluctuations, are recorded when liquidated or over the life of the contract, depending on the type of instrument. Unrealized losses are provided for at year-end and the corresponding amount is booked under Net income from financial transactions.

Personnel expenses

This item includes all expenses related to personnel, notably the cost of the legal employee profit sharing and incentive plans for the financial year as well as the cost of internal restructuring operations.

Under law No. 2003-775 dated August 21, 2003 which reformed the French pension system, the method used to estimate provisions for retirement payments in the Group's French subsidiaries was changed. The difference in results is booked under Personnel expenses as of the date on which the regime was changed, and on a straight-line basis for the average number of years still to be worked by the staff entitled to the payment.

Cost of risk

The item Net cost of risk is limited to net allocations to provisions for counterparty risks, country risks and disputes. Net provisions for risks and commitments are classified by type of risk in the corresponding accounts on the income statement.

Net income from long-term investments

This item covers capital gains or losses realized on disposals, as well as the net allocation to provisions for investments in non-consolidated subsidiaries and affiliates, other long-term equity investments, longterm investment securities, and offices and other premises. Income from real-estate holdings excluding offices (essentially assets held in the Group's real estate portfolio) is booked under Net banking income.

Income tax

Current taxes

In France, the normal corporate income tax rate is 33.3%. However, until December 31, 2004 long-term capital gains on equity investments are taxed at 19%. Moreover, French companies are subject to a surcharge introduced in 1995 equal to 3% of the tax due before allocation of tax credits, which will be progressively reduced to zero until 2006. Additionaly, a Contribution sociale de solidarité (national contribution payment based on pre-tax earnings) was introduced in 2000 equal to 3.3% (after a deduction from basic taxable income of EUR 0.76 million). Dividends from companies in which Société Générale's interest is at least 5% are tax exempt. The Amending Finance Law for 2004, published on December 30, 2004 will progressively reduce the tax rate for gains on the disposal of equity investments to 15% or 0% depending on the tax qualification of the securities. In parallel to this reduction, the Law has introduced an exceptional tax on the special reserve for long-term gains recorded by French companies in their individual accounts during previous years for the share of annual net income corresponding to long-term gains on disposal of equity investments. At December 31, 2004 French liable entities have recorded the expense relating to this exceptional tax under Income tax for a consolidated amount of EUR 18 million.

Tax credits arising in respect of interest from loans and income from securities are recorded in the relevant interest account to the extent that they have effectively been applied in settlement of income taxes for the year. The related tax charge is included under Income tax on the consolidated income statement.

Deferred taxes

Deferred taxes are booked when there is a timing difference between the restated book value and the tax value of balance sheet items. They are calculated using the liability method of tax allocation. Deferred taxes recorded in earlier years are adjusted for subsequent changes in the tax rate. The effect of such changes is included when determining the deferred tax expense for the period. Net deferred tax assets are not recorded unless it is probable that the subsidiary has a recovery in view on a determined time.

Notes to the consolidated financial statements

For 2004 and the following years, the normal tax rate applicable to French companies to determine their deferred tax is 34.93%, and the reduced rate is between 1.71% and 15.72% depending on the nature of the taxed transactions.

Deferred taxes are determined by each tax entity within the Group and are not discounted when the corresponding effect is not significant or when a precise timetable has not been drawn up.

Exceptional items

This caption includes income earned and expenses incurred by the Group that are considered to be exceptional in view of either the amount involved or the manner in which they were generated. In most cases, the said income or expenses are produced by events that fall outside the Group's activity.

Pension and retirement costs

■ In France

In 1993, Société Générale and its French banking subsidiaries, together with the rest of the French banking industry, joined the national unfunded multi-employer retirement plans Agirc and Arrco. As a result, these companies' pension schemes have been closed and they are only liable for benefits in relation to employees who have already retired and payments relating to the past services of current employees. The actuarial present value of residual liabilities under these plans has been estimated, based on information currently available. The assets of the retirement plans and the provisions made are sufficient to cover the present value of liabilities. In case of shortage, this cost is recorded as an allowance over the average remaining service life of the employees in question.

In addition, several Group companies pay retirement benefits based on the number of years of service to retiring employees, as well as long-service awards and supplementary pensions.

Commitments under these various plans amounted to EUR 1,081 million at December 31, 2004 and were fully covered by assets or provisions.

■ Outside France

The commitments under these various plans (pensions, retirement payments, long-service awards) are covered by assets or provisions. The majority of these commitments relate to retirement benefits accruing to active staff or former staff who have left the company.

At December 31, 2004, the commitments relating to the Group's foreign entities were estimated at EUR 1,036 million, of which 79% were covered by assets or provisions. The remaining 21% is the unfunded actuarial liability. In accordance with Group practice, this is covered by a provision which is booked over the average remaining period of active service of the employees in question.

Under IFRS standards adopted in July 2003 by the European Accounting Regulation Committee, the accounting principles described in this note for Société Générale Group's consolidated accounts will be modified for the 2005 accounts and for the compara- tive data published for the 2004 financial year. The accounting principles that will then be applied to restate the comparative information for 2004 are presented in the specific IAS section of the annual report.

Note 2 Consolidation scope

As at December 31, 2004, the Group's consolidation scope included 683 companies:

• 616 fully consolidated companies;
• 53 proportionately consolidated companies;
• 14 companies accounted for by the equity method.

In accordance with the consolidation rules defined in Regulation No. 99-07 of the French Accounting Regulation Committee, none of the special purpose vehicles created in the course of Société Générale's client-related securitization activities are controlled by the Group.

Any commitments granted to these entities, notably in the form of liquidity lines or letters of guarantee, are recognized and valued in accordance with the generally accepted accounting principles applicable to these instruments.

The main changes to the consolidation scope at December 31, 2004 compared with the scope applicable for the accounts at December 31, 2003 were as follows:

During the first half of 2004

■ The Group raised its stake in TCW to 66.54%, representing a 5.64% increase against December 31, 2003.

Agreements signed at the time of the acquisition of TCW include deferred put and call options on 9.5% of TCW's capital, broken down into annual tranches of 4.75% over the period 2005-2006. The strike prices of these options are dependent on the company's future performance.

Finally, the balance of shares held by employees is subject to deferred call and put options, exercisable from 2008, at strike prices that are dependent on the company's future performance.

• Sogelease Egypt, which is 61.73%-owned, is fully consolidated.
• Sagem Lease, which is wholly-owned by the Group, was fully consolidated.

■ SG Serbie Bank, which was deconsolidated on December 31, 2000, was reincorporated into the consolidation scope.

■ The Group increased its stake in Sogéprom from 70% at December 31, 2003 to 100% at June 30, 2004.

■ Société Générale took a 50.01% stake in General Bank of Greece (GBG), which was fully consolidated.

■ Following the sale of Sophia, 31 companies previously consolidated by the equity method were removed from the consolidation scope.

During the second half of 2004:

■ SG Equipment Finance Schweiz AG, wholly-owned by the Group, was fully consolidated.

■ Société Générale took over all the Equipment Finance and Factoring activities of the Norwegian group Elcon, which were fully consolidated.

■ The debt securitisation fund French Supermarkets 1, wholly-owned, was fully consolidated.

■ The Lyxor Strategium 1 fund, wholly-owned by Société Générale, was fully consolidated.

■ OOO Rusfinance, in which the Group holds a 51.01% stake, was fully consolidated.

■ Société Générale acquired 100% of the capital of Parsys Espana, which was fully consolidated.

Note 3 Due from banks

In millions of euros at December 31	2004	2003	2002
Demand deposits and loans
Current accounts	9,002	7,590	8,583
Overnight deposits and loans	413	702	267
Loans secured by overnight notes	8	53	385
Term
Term deposits and loans (1)	10,438	9,635	12,928
Subordinated and participating loans	713	688	539
Loans secured by notes and securities	100	45	187
Related receivables	189	208	270
Gross amount	20,863	18,921	23,159
Provisions for possible losses	(77)	(94)	(114)
Net amount	20,786	18,827	23,045
Securities purchased under resale agreements	45,328	41,455	31,309
Total	66,114	60,282	54,354

(1) At December 31, 2004, doubtful loans amounted to EUR 127 million (of which EUR 113 million were non-performing loans) against EUR 143 million at December 31, 2003 and EUR 117 million at December 31, 2002.

Note 4 Customer loans

In millions of euros at December 31	2004	2003	2002
Trade notes	8,085	7,729	7,903
Other loans (1) (2):
– Short-term loans	46,509	39,021	43,610
– Export loans	3,388	3,610	4,649
– Equipment loans	35,486	33,214	27,506
– Mortgage loans	46,127	40,743	35,233
Other loans	31,411	27,690	31,105*
Sub-total	162,921	144,278	142,103
Overdrafts	11,981	12,238	12,361
Related Receivables	1,568	1,461	1,386*
Gross Amount	184,555	165,706	163,753
Allowances for possible losses	(6,275)	(6,497)	(6,894)*
Net amount (3)	178,280	159,209	156,859
Loans secured by notes and securities	64	443	227
Securities purchased under resale agreements	31,495	33,895	27,683
Total	209,839	193,547	184,769
* Amounts restated in relation to those given in 2002 annual report.
(1) Other loans by customer type:
Non-financial customer
– Corporates	73,489	68,286	70,724
– Individual customers	59,833	52,568	45,926
– Local authorities	8,327	6,265	6,762
– Self-employed professionals	7,117	6,870	6,455
– Governments and central administrations	1,778	1,959	2,116
– Other	2,949	2,440	1,755
Financial customers	9,428	5,890	8,365
Total	162,921	144,278	142,103

(2) At December 31, 2004, doubtful loans amounted to EUR 9,797 million (of which EUR 5,492 million were non-performing loans) against EUR 10,115 million at December 31, 2003

and EUR 10,064 million at December 31, 2002.

(3) Entities acquired since December 31, 2003 accounted for EUR 2,929 million in net outstanding customer loans.

Note 5 Lease financing and similar agreements

In millions of euros at December 31	2004	2003	2002
Real estate lease financing agreements	5,824	5,650	5,452
Equipment lease financing agreements	10,400	9,176*	8,848*
Lease-purchase and similar agreements	4,503	3,104*	3,045*
Related receivables	153	206	188
Gross amount (1)	20,880	18,136	17,533
Provisions for possible losses	(244)	(250)	(182)
Net amount (2)	20,636	17,886	17,351

* Amounts restated in relation to those given in 2002 and 2003 annual reports.

(1) At December 31, 2004, doubtful loans amounted to EUR 394 million (of which EUR 133 million were non-performing loans) against EUR 418 million at December 31, 2003 and EUR 284 million at December 31, 2002.

(2) Entities acquired since December 31, 2003 accounted for EUR 1,976 million in net lease financing and similar agreements.

Note 6

Treasury notes, bonds and other debt securities, shares and other equity securities

		2004			2003				2002
In millions of euros at December 31	Treasurynotesandsimilarsecurities	Sharesandotherequitysecurities	Bondsandotherdebtsecurities	Total	Treasurynotesandsimilarsecurities	Sharesandotherequitysecurities	Bondsandotherdebtsecurities	Total	Total
Trading securities	30,452	39,771	43,323	113,546	21,792	39,125	31,706	92,623	76,637
Short-term investment securities:– Gross book value– Provisions– Net book value	5,517(26)5,491	8,313(195)8,118 (1)	11,932(67)11,865	25,762(288)25,474	4,281(24)4,257	8,071(225)7,846 (1)	15,150(215)14,935	27,502(464)27,038	24,533(530)24,003
Long-term investment securities:– Gross book value– Provisions– Net book value	4,941–4,941	–––	19,287 (2)–19,287	24,228–24,228	4,391–4,391	–––	20,705(1)20,704	25,096(1)25,095	26,906–26,906
Related receivables	198	69	364	631	170	56	427	653	778
Total	41,082	47,958	74,839	163,879	30,610	47,027	67,772	145,409	128,324

(1) Including treasury stock held for allocation to employees: EUR 112.6 million (against EUR 169.2 million at December 31, 2003 and EUR 167,3 million at December 31, 2002).

	2004	2003
Number of shares	2,334,060	3,377,145
Nominal value per share (in euros)	1.25	1.25
Market value per share (in euros)	74.5	70.0
Book value per share (in euros)	48.22	48.22

(2) Of which securities carried by newly consolidated special purpose vehicles: EUR 3.7 billion of municipal bonds intended to be held to maturity.

Note 6 (continued from previous page) Additional information on securities

In millions of euros at December 31	2004	2003	2002
Estimated market value of short-term investment securities:– Unrealized capital gains (1)	270	70	178
Estimated value of long-term investment securities (2)	76	(2)	(64)
Premiums and discounts relating to short-term and long-term investment securities	62	(86)	(15)
Securities which changed category during the year:– Trading securities reclassified as short-term investment securities– Securities reclassified as long-term investment securities– Long-term investment securities reclassified as short-term investment securities	131–48	695–624	525195778
Long-term investment securities sold before maturity	353	69	542
Investment in mutual funds:– French mutual funds– Foreign mutual fundsOf which capital appreciation funds	15,3535,741638	12,8103,369688	8,7472,751675
Listed securities	130,087	117,427	112,641
Subordinated securitiesSecurities lent	6866,972	7273,656	3574,027

(1) Not including unrealized gains or losses on any forward financial instruments used to hedge short-term investment securities.

(2) Including unrealized gain or loss on instruments used to hedge long-term investment securities.

Note 7 Investments of insurance companies

In millions of euros at December 31	2004	2003	2002
Real estate investments	344	265	223
Bonds and other debt securities	29,516	25,728	21,222
Investments held to guarantee unit-linked policies	15,052	14,031	13,384
Other investments	1,126	1,117	867
Shares and other equity securities	2,916	1,743	1,561
Total	48,954	42,884	37,257

Note 8

Investments in non-consolidated subsidiaries and affiliates, and other long-term equity investments

In millions of euros at December 31	2004	2003	2002
Principal companies (1):
0 to 5%	3,376	4,381	5,213
Accor, Adecco, Alcatel, Altadis, Arcelor, Aviva, Carrefour, Dexia,France Télécom, ONA, Pernod Ricard, Peugeot SA, Sanofi, SCH,Sodexho Alliance, TF1, Total, Veolia Environnement, Vivendi Universal
5 to 10%	398	629	605
Cologne Re Managers, Hornby Lane
10 to 20%	351	339*	255*
Crédit Logement, Sopra, Sommer SA, Sicovam Holding
+ 20%	255	82*	112*
G Finance Luxembourg, Lysus, SCI Secovalde
Sub-total	4,380	5,431	6,185
Other companies	1,160	1,191*	1,400*
Gross book value (2)	5,540	6,622	7,585
Provisions for possible losses	(883)	(1,352)	(1,332)
Advances to non-consolidated companies	3	4	14
Net book value (3)	4,660	5,274	6,267

* Amounts restated in relation to those given in 2002 and 2003 annual reports.

(1) Only investments with a book value over EUR 30 million at December 31, 2004 are mentioned.

(2) Movements over the 2004 fiscal year: EUR (1,082) million, of which: acquisitions = EUR 554 million, disposals = EUR (1,573) million, changes in consolidation scope

and other movements = EUR (63) million.

(3) Of which listed companies: net book value at December 31, 2004 = EUR 3,062 million; market value = EUR 3,440 million.

Note 9

Tangible and intangible fixed assets

				Changes in		2004
	Gross book			consolidation	Gross	Accumulated	Net book
	value			scope and	book	depreciation and	value
In millions of euros at December 31	2003	Acquisitions	Disposals	other movements	value	amortization 2004	2004
Operating assets
Intangible assets
Start-up costs	19	4	–	3	26	(18)	8
Software, EDP development costs	1,532	93	(11)	101	1,715	(1,228)	487
Other	456	194	(1)	(154)	495	(88)	407
Sub-total	2,007	291	(12)	(50)	2,236	(1,334)	902
Tangible assets
Land and buildings	2,859	20	(39)	93	2,933	(842)	2,091
Other	3,587	393	(105)	(19)	3,856	(2,651)	1,205
Sub-total	6,446	413	(144)	74	6,789	(3,493)	3,296
Non-operating assets (1)
Tangible assets
Land and buildings	150	2	(4)	(35)	113	(38)	75
Pure rental transactions and other	5,577*	2,277	(1,679)	(14)	6,161	(1,725)	4,436
Sub-total	5,727	2,279	(1,683)	(49)	6,274	(1,763)	4,511
Total fixed assets	14,180	2,983	(1,839)	(25)	15,299	(6,590)	8,709

* Amounts restated in relation to those given in 2003 annual report.

(1) Not including the proprietary real estate investment portfolio held by specialized financing companies.

SOCIÉTÉ GÉNÉRALE GROUP - 2004 ANNUAL REPORT

Notes to the consolidated financial statements

Note 10

Goodwill (1)

		2004			2003		2002
In millions of euros at December 31	Grossbook value	Accumulatedamortization	Netbook value	Grossbook value	Accumulatedamortization	Netbook value	Netbook value
Retail Banking	1,739	(383)	1,356	1,581	(266)	1,315	1,344
French Networks	114	(66)	48	115	(62)	53	56
Retail Banking network outside France (2)	1,141	(217)	924	1,033	(135)	898	961*
Specialized subsidiaries and other (3)	484	(100)	384	433	(69)	364	327*
Corporate and Investment Banking	170	(160)	10	180	(161)	19	71
Corporate Banking	45	(40)	5	45*	(34)*	11*	19*
Investment Banking	125	(120)	5	135*	(127)*	8*	52*
Global Investment
Management and Services	965	(231)	734	994	(178)	816	738
Asset Management	590	(130)	460	595	(97)	498	609
Private Banking	321	(85)	236	323	(65)	258	124
Boursorama (4)	49	(11)	38	67*	(7)*	60*	5*
Securities Services	5	(5)	–	9*	(9)*	–	–
Corporate Center and other	7	(1)	6	3	(3)	–	1
Total	2,881	(775)	2,106	2,758	(608)	2,150	2,154

* Amounts restated in relation to those given in 2002 and 2003 annual reports.

(1) Current and exceptional amortizations expenses are assigned to the Corporate Center.

(2) The change over 2004 in gross goodwill booked by Retail Banking outside France is essentially due to:

– the acquisition of the General Bank of Greece (GBG) in the second quarter of 2004,

– the impact of currency translation on goodwill booked in foreign currencies,

– the acquisition of an additional 7.32% stake in the capital of Banque Roumaine pour le Développement in the fourth quarter of 2004.

(3) The change over 2004 in gross goodwill booked by specialized subsidiaries is essentially due to: – the acquisition of SG Fimans AS Norway (formerly Elcon) in the third quarter of 2004.

– the consolidation of Rusfinance in the fourth quarter of 2004.

(4) The goodwill on Selftrade, which merged with Boursorama in 2003, was revised in the fourth quarter of 2004.

Note 11

Accruals, other accounts receivable and other assets

In millions of euros at December 31	2004	2003	2002
Other assets
Miscellaneous receivables	17,786	14,106*	12,607
Premiums on options purchased	32,555	21,441	21,481
Settlement accounts on securities transactions	1,903	3,934	2,192
Other assets	1,021	759	1,148
Other insurance assets	390	323	212
Sub-total	53,655	40,563	37,640
Accruals and similar
Prepaid expenses	546	524	400
Accrued income	1,890	2,572*	2,724
Deferred taxes (1)	192	90	–
Other (2)	14,527	13,013	18,952
Sub-total	17,155	16,199	22,076
Gross amount	70,810	56,762	59,716
Provisions for possible losses	(167)	(214)	(221)
Net amount	70,643	56,548	59,495

* Amounts restated in relation to those given in 2003 annual report.

(1) Breakdown of deferred tax by category

	Deferred income	Deferred income
In millions of euros at December 31 2004	tax assets	tax liabilities
Timing differences related to:
Inner reserve arising from lease financing transactions		722
Results of partnerships		187
Reassessment reserves (Note 1)		17
Others (principally relating to the deductibility of provisions)	1,118
Total	1,118	926

(2) Other accruals mainly comprise foreign currency debit adjustment accounts, bonds discounts at issuance or redemption of bonds and similar securities, and the profits on revaluation of forward financial instruments.

Note 12 Due to banks

In millions of euros at December 31	2004	2003	2002
Demand deposits
Demand deposits and current accounts.	19,018	17,582	12,311
Borrowings secured by overnight notes	–	–	43
Sub-total	19,018	17,582	12,354
Term deposits
Term deposits and borrowings	49,045	46,309	37,508
Borrowings secured by notes and securities	144	312	245
Sub-total	49,189	46,621	37,753
Related payables	345	324	395
Securities sold under repurchase agreements	23,809	19,081	18,737
Total	92,361	83,608	69,239

Note 13 Customer deposits

In millions of euros at December 31	2004	2003	2002
Special savings accounts
Demand	25,188	21,587	18,287
Term	21,471	21,874	21,775
Sub-total	46,659	43,461	40,062
Other demand deposits
Businesses and sole proprietors	31,898	29,650	24,866
Individual customers	26,077	23,745	21,594
Financial institutions	9,570	10,705	5,753
Other	7,071	4,184	5,303
Sub-total	74,616	68,284	57,516
Other term deposits
Businesses and sole proprietors	19,156	25,783	25,051
Individual customers	11,797	10,213	10,988
Financial institutions	17,458	5,797	12,309
Other	3,847	5,717	5,902
Sub-total	52,258	47,510	54,250
Related payables	1,007	951	949
Total customer deposits (1)	174,540	160,206	152,777
Borrowings secured by notes and securities	1,626	3,229	2,210
Securities sold to customers under repurchase agreements	37,267	32,655	41,098
Total	213,433	196,090	196,085

(1) Entities acquired in 2004 accounted for EUR 2,315 million in customer deposits.

Note 14 Securitized debt payables

In millions of euros at December 31 2004 2003 2002 Term savings certificates. 772 841 881 Bond borrowings 5,111 4,607 5,253 Related payables 31 84 185 Sub-total 5,914 5,532 6,319 Interbank certificates and negotiable debt instruments 91,376 77,052 71,104 Related payables 440 333 454 Total 97,730 82,917 77,877

Note 15

Underwriting reserves of insurance companies

In millions of euros at December 31	2004	2003	2002
Unit-linked policy underwriting reserves	14,797	14,149	13,400
Life insurance underwriting reserves	31,890	26,882	22,262
Non-life insurance underwriting reserves	141	133	98
Total	46,828	41,164	35,760

Note 16 Accruals, other accounts payable and other liabilities

In millions of euros at December 31	2004	2003	2002
Transactions on securities
Amounts payable for borrowed securities	8,523	8,611	6,640
Other amounts due for securities	28,880	32,575	24,272
Sub-total	37,403	41,186	30,912
Other liabilities
Miscellaneous payables	15,665	13,927	12,627
Premiums on sold options	34,853	23,699	21,700
Settlement accounts on securities transactions	1,826	3,901	2,975
Other securities transaction	121	70	51
Related payables	148	227	180
Other insurance liabilities	78	73	84
Sub-total	52,691	41,897	37,617
Accruals and similar
Accrued expenses	3,893	3,858	4,148
Deferred taxes	–	–	89
Deferred income	1,884	2,014	2,358
Other (1)	15,375	8,771	12,643
Sub-total	21,152	14,643	19,238
Total	111,246	97,726	87,767

(1) This item mainly includes foreign currency credit adjustment accounts and the losses on revaluation of forward financial instruments.

Note 17 Provisions and reserves

In millions of euros at December 31	2004	2003	2002
Provisions for possible losses charged against assets
Banks	77	94	114
Customer loans	6,275	6,497	6,894*
Lease financing agreements	244	250	182
Other	245	302	263
Sub-total	6,841	7,143	7,453
Provisions for general risks and commitments booked as a liability
Prudential general country risk reserve (Note 1)	432	453	465
Commitments made to banks	6	6	4
Commitments made to customers	221	273	327*
Sectoral provisions and other (1)	572	558	277*
Provisions for other risks and commitments	1,811	1,559	1,401*
Sub-total	3,042	2,849	2,474
Total provisions (excluding securities) (2)	9,883	9,992	9,927
Provisions on securities	1,171	1,816	1,862
Provisions on investments of insurance companies	8	2	10
Total provisions (3)	11,062	11,810	11,799

* Amounts restated in relation to those given in 2002 annual report.

(1) As of January 1, 2003, all sectoral provisions that cannot be assigned to a single non-performing loan have been grouped in a specific account. The financial statements as of December 31, 2002 were restated accordingly for the purpose of comparison. These provisions were charged against the assets side of the balance sheet in the amount of EUR 176 million or were carried on the liabilities side of the balance sheet in the amount of EUR 101 million (EUR 71 million in off-balance sheet items for commitments made to customers and EUR 30 million in provisions for risks and commitments).

(2) The change in risk reserves breaks down as follows:

			Other income		Change in scope
In millions of euros at December 31	2003	Netallocations	statementbalances (5)	Usedprovisions	and exchangerates	2004
Prudential country risk reserve	453	6	–	–	(27)	432
Provisions for identified risks	7,980	328	32	(839)	139	7,640
Provisions for general risks and commitments (4)	1,559	101	187	(135)	99	1,811
Total	9,992	435	219	(974)	211	9,883

(3) An analysis of risk provisioning is given in the Management Report and the principles for allocating provisions are set out in the "Risk management" section of the annual report. The insurance underwriting reserves are presented in Note 15.

(4) Analysis of provisions for general risks and commitments:

			Other income		Change in scope
In millions of euros at December 31	2003	Netallocations	statementbalances (5)	Usedprovisions	and exchangerates	2004
Provisions for pensions and other post-retirement benefits	302	–	16	–	23	341
Provisions for restructuring costs and litigation expenses	179	–	26	(3)	1	203
Provisions for tax adjustments	304	–	71	(11)	(1)	363
Provisions for forward financial instruments	107	–	70	(4)	(36)	137
Other provisions for risks and litigation	667	101	4	(117)	112	767
Total	1,559	101	187	(135)	99	1,811

(5) Provisions for unpaid interest income are charged against net banking income and the impact on earnings of provisions for general risks and commitments is recognized in the income statement balances.

Note 18 Subordinated debt

						Beyond
Outstanding	2005	2006	2007	2008	2009	2009	Undated
8,421	566	274	547	122	314	6,281	317
1,824	261	588	–	–	–	272	703
993	–	–	–	–	–	851	142
336	21	45	–	54	–	–	216
11,574	848	907	547	176	314	7,404	1,378
29	–	–	–	–	–	9	20
56	–	–	–	–	–	30	26
2	–	–	2	–	–	–	–
87	–	–	2	–	–	39	46
269	–	–	–	–	–	–	269
11,930	848	907	549	176	314	7,443	1,693

Note 19

Commitments granted

In millions of euros at December 31	2004	2003	2002
Loan commitments
to banks	6,067	5,988*	10,578*
to customers (1)	98,134	93,288*	80,544*
Total	104,201	99,276	91,122
Guarantee commitments
on behalf of banks	1,739	2,340	4,999*
on behalf of customers (1) (2)	48,570	43,996	39,591*
Total	50,309	46,336	44,590

* Amounts restated in relation to those given in 2002 and 2003 annual reports.

(1) As at December 31, 2004, credit lines and guarantee commitments granted to securitization vehicles and other special purpose vehicles amounted

to EUR 21.4 billion and EUR 0.7 billion respectively.

(2) Including capital and performance guarantees given to the holders of units in mutual funds managed by entities of the Group.

Securitization transactions

The Société Générale Group carries out securitization transactions on behalf of customers or investors, and to this end provides credit enhancement and liquidity facilities to the securitization vehicles. These vehicles are not consolidated in the Group's financial statements, in accordance with current accounting regulations.

As at December 31, 2004, there were six non-consolidated vehicles (Barton, Antalis, Asset One, Homes, ACE, PACE) structured by the Group on behalf of customers or investors. Total assets held by these vehicles and financed through the issuance of commercial paper amounted to EUR 15,053 million on this date.

The default risk on these assets is borne in the first place by the transferors of the underlying receivables or by third parties. The Société Générale Group provides an additional guarantee as a credit enhancement through the issuance of letters of credit in the amount of EUR 692 million. Furthermore, the Group has granted these vehicles liquidity lines in the amount of EUR 21,369 million on this date.

Use of credit derivatives

■ Guarantee commitments granted

Credit derivatives account for a marginal part of the hedging sales activity.

■ Guarantee commitments received

The Group uses credit derivatives in the management of its loan portfolio. They are primarily used to manage the concentration of our outstanding corporate loans. This reduces exposure to certain counterparties.

The notional amounts of credit derivatives purchased for this purpose are recorded under off-balance sheet commitments received. They are almost exclusively hedging positions. In nominal terms, EUR 6.5 billion in credit default swaps (CDS) were purchased at the end of December 2004 with an average residual maturity of 2.9 years (hedging positions).

■ Trading

Credit derivatives are also purchased and sold for trading purposes. Nominal amounts are not relevant to assess the level of risk for these activities, which are monitored using the VaR method.

Note 20

Foreign exchange transactions

			2004		20032002
In millions of eurosat December 31	Assets	Liabi-lities	bought,not yetreceived	Currencies Currenciessold,not yetdelivered	Assets	Liabi-lities	bought,not yetreceived	Currencies Currenciessold,not yetdelivered	Assets	Liabi-lities	bought,not yetreceived	Currencies Currenciessold,not yetdelivered
EUR	373,481	358,666	79,122	101,956	330,871	326,459	59,950	72,928	302,842*	288,050*	60,921	86,421
USD	136,550	158,138	187,736	161,378	126,962	140,756	146,595	129,541	124,273*	143,038*	166,817	143,769
GBP	16,181	18,026	31,268	31,948	18,563	19,484	29,389	28,369	16,147	16,295	28,503	26,865
JPY	15,114	10,699	38,528	41,726	14,817	8,493	22,378	28,988	12,894	8,285	23,719	28,070
Other currencies	59,763	55,560	70,442	71,838	48,174	44,195	60,550	61,609	45,236*	45,724*	69,449	66,676
Total	601,089	601,089	407,096	408,846	539,387	539,387	318,862	321,435	501,392	501,392	349,409	351,801

* Amounts restated in relation to those given in 2002 annual report.

Note 21

Forward financial instrument commitments

	Fair Value
	at December 31, 2004		Trading	Hedging		Total commitments
In millions of euros at December 31	Assets	Liabilities	transactions	transactions	2004	2003	2002
FIRM TRANSACTIONS
Transactions on organized markets
– Interest rate futures	0	0	578,752	2,351	581,103	423,121	416,207
– Currency futures	5,218	5,181	15,896	3,197	19,093	3,225	3,166
– Other forward contracts	5,447	4,666	247,313	66	247,379	136,210	71,456
OTC agreements
– Interest rate swaps	68,731	69,427	3,297,215	88,695	3,385,910	2,750,728	2,831,911
– Currency financing swaps	54	38	131,470	2,698	134,168	116,083	101,782
– Forward Rate Agreements (FRA)	248	216	394,951	570	395,521	340,796	303,146
– Other	1,016	1,241	12,990	26,169	39,159	47,808	41,725
OPTIONS
– Interest rate options	8,474	8,597	1,398,912	54,500	1,453,412	1,217,546	1,021,073
– Currency options	3,002	2,393	179,122	402	179,524	102,087	94,424
– Options on stock
exchange indices and equities	19,035	22,130	326,426	11,900	338,326	363,016	255,386
– Other	3,047	3,480	82,312	39	82,351	46,379	47,477
Total	114,272	117,369	6,665,359	190,587	6,855,946	5,546,999	5,187,753

Credit risk equivalent

The credit risk equivalent on these transactions determined in accordance with the methods recommended by the Basel Committee for the calculation of the international solvency ratio, breaks down as follows:

In millions of euros at December 31	2004	2003	2002
OECD member governments and central banks	758	717	369
OECD member banks and local authorities	15,786	14,282	16,414
Customers	8,825	7,938	8,535
Non-OECD member banks and central banks	590	447	420
Total (including netting agreements)	25,959	23,384	25,738

Bilateral netting agreements reduced the credit risk equivalent by EUR 71,687 million at December 31, 2004 versus EUR 59,994 million at December 31, 2003 and EUR 66,701 million at December 31, 2002.

Remaining term of the notional amounts of commitments

In millions of euros at December 31	0-1 year	1-5 years	Over 5 years	Total
Interest rate swaps	2,160,419	731,975	493,516	3,385,910
Currency financing swaps	58,314	66,607	9,247	134,168
Interest rate futures	898,469	77,810	345	976,624
Foreign exchange futures	18,949	144	–	19,093
Other firm instruments	159,080	117,597	9,861	286,538
Interest rate options	480,072	931,538	41,802	1,453,412
Foreign exchange options	162,957	14,897	1,670	179,524
Other options	351,944	61,771	6,962	420,677
Total	4,290,204	2,002,339	563,403	6,855,946

Note 22

Breakdown of assets and liabilities by term to maturity

				Over	Inter-company
In millions of euros at December 31	0-3 months	3 months - 1 year	1-5 years	5 years	eliminations	Total
ASSETS
Transactions with banks
Due from banks	213,879	31,787	41,467	36,311	(257,330)	66,114
Transactions with customers
Customer loans	99,906	26,366	72,715	49,414	(38,562)	209,839
Lease financing and similar agreements	1,869	3,152	10,745	4,870	–	20,636
Bonds and other debt securities
Trading securities	18,045	46,875	876	264	(22,737)	43,323
Short-term investment securities	1,715	6,360	12,962	4,812	(13,797)	12,052
Long-term investment securities	549	2,270	6,237	11,369	(961)	19,464
LIABILITIES
Transactions with banks
Due to banks	241,626	33,912	49,561	40,145	(272,883)	92,361
Transactions with customers
Customer loans	180,911	8,497	23,986	19,189	(19,150)	213,433
Securitized debt payables	57,556	24,514	28,236	23,395	(35,971)	97,730

SOCIÉTÉ GÉNÉRALE GROUP - 2004 ANNUAL REPORT

Note 23 Consolidated cash flow statement

In millions of euros	Uses	Sources
Cash flow		3,993
Dividends paid	1,199
Net Cash Flow (a)		2,794
Capital increase		358
Treasury stock decrease/increase	896	163
Subordinated debt decrease/increase	471	1,352
Capital transactions (b)		506
(I) – Long-term funds (a) + (b)		3,300
Cost of investment in newly consolidated affiliates	312
Purchase/proceeds from sale of affiliates and other long-term investments	279	1,769
Purchase/proceeds from sale of fixed assets	1,755	471
(II) – Net cash inflow/(outflow) from investing activities	106
(I) – (II) Change in working capital		3,194
Interbank activities and cash		15,886
Customer loans	20,861
Customer deposits		14,208
Securities activities	14,130
Bond debt		451
Forward financial instrument commitments		1,319
Lease financing activities	1,268
(III) – Net cash inflow/(outflow) from banking activities	4,395
Insurance investments	6,132
Insurance deposits		5,656
(IV) – Cash inflow/(outflow) from non banking activities	476
(V) – Other		1,677
(III) + (IV) – (V) Change in cash inflow/(outflow) from operating activities	3,194

The cash flow statement summarizes the cash flows resulting from transactions carried out by the Group that have an impact on its liquidity. Non-cash flows do not figure in this statement, notably the waiver of accounts receivable.

The investment of funds is recognized at the cost price.

The funds generated on the disposal of fixed assets are booked at the selling price (including capital gains or losses).

Translation adjustments relating to capital transactions are booked in the account "Other items". In contrast, translation adjustments concerning banking and non-banking activities are recognized in the corresponding accounts.

Note 24

Interest income and expenses from transactions with banks

In millions of euros at December 31	2004	2003	2002
Transactions with central banks, post office accounts and banks	1,578	1,461*	2,090
Net premiums and discounts	78	75	77
Total interest income	1,656	1,536	2,167
Transactions with central banks, post office accounts and banks	(2,356)	(2,592)	(3,382)
Total interest expenses	(2,356)	(2,592)	(3,382)
Securities purchased under resale agreementsand loans secured by notes and securities	2,409	1,744	2,112
Securities sold under repurchase agreementsand borrowings secured by notes and securities	(2,493)	(2,004)	(2,121)
Net interest income from transactions with banks	(784)	(1,316)	(1,224)

* Amounts restated in relation to those given in 2003 annual report.

Note 25

Interest income and expenses from transactions with customers

In millions of euros at December 31	2004	2003	2002
Trade notes	690	660	693
Other customer loan
– Short-term loans	2,237	2,173	2,583
– Export loans	211	242	524
– Equipment loans	1,621	1,552	1,489
– Mortgage loans	2,187	2,040	1,918
– Other loans	1,055	1,010	1,079
Sub-total	7,311	7,017	7,593
Overdrafts	626	684	779
Net premiums and discounts	(27)	(9)	(22)
Total interest income	8,600	8,352	9,043
Special savings accounts	(1,224)	(1,276)	(1,298)
Other deposits	(2,076)	(1,806)	(2,510)
Total interest expenses	(3,300)	(3,082)	(3,808)
Securities purchased under resale agreements and loans
secured by notes and securities	1,544	1,698	1,593
Securities sold under repurchase agreements
and borrowings secured by notes and securities	(2,407)	(2,594)	(2,604)
Net interest income from transactions with customers	4,437	4,374	4,224

Note 26

Net income from lease financing and similar agreements

In millions of euros at December 31	2004	2003	2002
Real estate lease financing agreements	267	311	305
Equipment lease financing agreements	531	565	421
Lease-purchase and similar agreements	874	612	648
Net total	1,672	1,488	1,374

Note 27 Dividend income

In millions of euros at December 31	2004	2003	2002
Dividends from shares and other equity securities	217	393	92
Dividends from investments in non-consolidated subsidiariesand affiliates and other long-term securities	179	189	199
Total (1)	396	582	291

(1) Dividends received from investments in the trading portfolio have been classified under "Net income from financial transactions".

Note 28 Net fee income

In millions of euros at December 31	2004	2003	2002
Fee income from:
Transactions with banks	145	123	93
Transactions with customers	1,658	1,575	1,353
Securities transactions	2,542	2,170	2,513
Primary market transactions	224	222	171
Foreign exchange transactions and forward financial instruments	509	428	520
Loan and guarantee commitments	459	482	454
Services and other	1,601	1,507	1,374
Sub-total	7,138	6,507	6,478
Fee expense on:
Transactions with banks	(164)	(154)	(153)
Securities transactions	(381)	(293)	(368)*
Foreign exchange transactions and forward financial instruments	(382)	(347)	(411)
Loan and guarantee commitments	(340)	(123)	(125)
Other	(602)	(506)	(428)
Sub-total	(1,869)	(1,423)	(1,485)
Net total (1)	5,269	5,084	4,993
(1) Net fee income breaks down by type of service, as follows:
– banking services and advisory	2,413	2,342	2,078
– guarantees and endorsements	118	358	330
– issuance	224	222	171
– asset management and life insurance	1,920	1,655	1,770
– brokerage and other	594	507	644*

* As of January 1, 2003, commissions paid to brokers who are considered to have the same status as salaried employees, which were previously booked as fees and commisions directly charged against Net Banking Income are recognized under personnal expenses. The commissions have been restated in the financial statements as of December 31, 2002 in the amount of EUR 119 million.

Note 29

Net income from financial transactions

In millions of euros at December 31	2004	2003	2002
Net income from the trading portfolio
Net income from operations on trading securities	3,854	4,615	(4,959)
Net income from forward financial instruments	(601)	(2,536)*	7,528
Net income from foreign exchange transactions	826	1,514	769
Sub-total (1)	4,079	3,593	3,338
Net income from short-term investment securities
Gains on sale	338	172	145
Losses on sale	(417)	(98)	(128)
Net reversal of provisions	177	23	26
Sub-total	98	97	43
Net income from shares intended for portfolio activity
Gains on shares intended for portfolio activity	12	(20)	(31)
Net allocation to provisions for portfolio activity	28	40	(87)
Sub-total	40	20	(118)
Net total	4,217	3,710	3,263

* Amounts restated in relation to those given in 2003 annual report.

(1) As transactions are recognized on the basis of the type of instrument and not on the basis of the purpose for which they are used, the income generated by the same must be assessed as a whole. It should be noted that this income does not include either the refinancing cost of financial transactions, or trading coupons. However, it does include the sales margin generated on structured products integrating forward financial instruments or on the distribution of complex products.

Note 30 Gross margin of insurance business

In millions of euros at December 31	2004	2003	2002
Earned premiums	7,448	6,524	5,398
Cost of benefits (including change in reserves)	(7,210)	(6,236)	(5,150)
Net income from investments	338	151	172
Other technical income and expenses	(348)	(302)	(287)
Reclassification of operating expenses	(125)	(92)	(82)
Total	103	45	51

The gross margin of insurance companies corresponds to the income generated on life and non-life insurance policies. In particular, it does not include front-end loads, management fees charged on the policy outstanding, commissions paid to the distribution networks, and financial income realized on capital investments, which are broken down in the other items making up net banking income.

The contribution of insurance companies to consolidated net banking income is as follows:

In millions of euros at December 31	2004	2003	2002
Contribution to NBI before elimination of intercompany transactions	593	465	449
Elimination of intercompany transactions (1)	222	159	165
Contribution to NBI after elimination of intercompany transactions	371	306	284

(1) This essentially concerns the elimination of commissions paid by the insurance companies to the distribution networks and the elimination of financial income on investments made in other Group companies.

Note 31 Net income from other activities

In millions of euros at December 31	2004	2003	2002
Net income from real estate development	40	30	45
Net income from real estate investments (1)	39	227	38
Net income from other activities	23	27	16
Total	102	284	99

(1) Net income from real-estate investments in the 2003 financial year includes a capital gain of EUR 189 million from the sale of the Paris Trocadéro building.

Note 32 Personnel expenses

In millions of euros at December 31	2004	2003	2002
Employee compensation (1)	4,626	4,431	4,428*
Social security benefits and payroll taxes (1)	1,772	1,657	1,537
Employee profit sharing and incentives (3)	205	235	214
Total	6,603	6,323	6,179
Average staff (2)	93,359	90,040	88,278
In France	51,753	51,349	50,689
Outside France	41,606	38,691	37,589

* As of January 1, 2003, commissions paid to brokers who are considered to have the same status as salaried employees which were previously booked as fees and commisions directly charged against Net Banking Income are recognized under personnal expenses.

Personnel expenses have been restated in the financial statements as of December 31, 2002 in the amount of EUR 119 million.

(1) Of which EUR 1,628 million for bonuses at December 31, 2004 (EUR 1,560 million at December 31, 2003 and EUR 1,310 million at December 31, 2002).

(2) Including temporary staff. The average headcount of newly acquired entities is not broken down on a pro rata basis over the holding period. Acquisitions in 2004 account for 2,707 staff. (3) Analysis of personnel expenses for the last five years:

In millions of euros at December 31	2004	2003	2002	2001	2000
Société Générale (4)
Profit sharing	–	15 (5)	(1)	1	52
Incentives	50	49	62	50	55
Employer contribution	72	72	74	67	62
Sub-total	122	136	135	118	169
Subsidiaries	83	99	79	66	70
Total	205	235	214	184	239

(4) Including SOGENAL in 2001.

(5) Provision for profit sharing.

Remuneration of members of the Board of Directors and Chief Executive Officers

Total attendance fees paid in February 2005 to the Company' directors for the 2004 financial year amounted to EUR 0.65 million. The remuneration paid in 2004 to the Chief Executive Officers amounted to EUR 4.35 million (including EUR 2.77 million in the form of performance-linked bonuses for the 2003 financial year).

Note 33 Cost of risk

In millions of euros at December 31	2004	2003	2002
Net allocation to provisions for identified risks
Provisions for identified risks	(328)	(948)	(1,243)
Provisions for risks and charges	(101)	(83)	(18)
Losses not covered by provisions and amounts recovered on write-offs	(106)	(144)	(101)
Sub-total	(535)	(1,175)	(1,362)
Net allocation to general country risk reserves	(6)	(51)	61
Net allocation to provisions for receivables and commitments	(541)	(1,226)	(1,301)

Note 34

Companies accounted for by the equity method

			Société		Société
			Générale's		Générale's share
	% voting		equity		in net income (loss)
In millions of euros at December 31	interest	Activity	contribution*	2004	2003	2002
Non-financial companies
Chesapeake Holding (CHC)	36.35	Structured finance	(68)	9	9	12
SIFA (1)	–	Portfolio management	–	–	–	4
Géodis (2)	16.63	Industrial and commercial company	(8)	9	5	(13)
Property companies of the Sogéprom group		Property companies	28	14	7	7
Other (4)			(3)	–	–	–
Sub-total			(51)	32	21	10
Financial companies
Sophia (3)	–	Property company	–	–	9	24
United Arab Bank	20.00	Bank	10	4	4	4
Companies of the SG Investment UK group (5)	–	Industrial and commercial companies	4	4	–	–
Other (4)			15	2	9	10
Sub-total			29	10	22	38
Total			(22)	42	43	48

* Including the Group's 2004 earnings.

(1) Exchange transaction in the second half of 2002 with the full stake exchanged for 100% of the capital of Fontanor II, which is now fully consolidated.

(2) In the second half of 2004, the Group sold 10.54% of its stake in Géodis.

(3) A company sold in February 2004 as part of the public offer launched by GE Real Estate Investissement France, a subsidiary of General Electric.

(4) Includes notably subsidiaries sub-consolidated by Komercni Banka (MPSS) and Crédit du Nord.

(5) Includes companies held by the Infrastructure Principal Finance Fund.

Note 35

Net income from long-term investments

In millions of euros at December 31	2004	2003	2002
Long-term investment securities
Net capital gains (or losses) on sale	2	4	47
Net allocation to provisions	1	–	–
Sub-total	3	4	47
Investments in non-consolidated subsidiaries and affiliates
Gains on sale (1)	275	466	744*
Losses on sale (1)	(79)	(48)	(268)*
Net allocation to provisions	(95)	(47)	(827)*
Sub-total	101	371	(351)
Operating fixed assets
Gains on sale	25	37	33
Losses on sale	(10)	(15)	(28)
Sub-total	15	22	5
Net total	119	397	(299)

* Amounts restated in relation to those given in 2002 annual report.

(1) Capital gains or losses on disposals are calculated using the net book value of the shares sold, including the write-back of provisions booked at the end of the previous financial period if applicable.

Note 36 Exceptional items

In millions of euros at December 31	2004	2003	2002
Exceptional gains	2	2	13
Exceptional losses	(50)	(48)	(183)
Net total	(48)	(46)	(170)

Breakdown of exceptional items

In millions of euros at December 31	2004	2003	2002
Provision booked to cover the fraud affecting
Cowen's former private client brokerage division (1)	(28)	(46)	(159)
Change in estimate of income invoiced for maintenance servicesprovided in connection with operating leasing activities (2)	(20)	–	–
Provisions for costs linked to introduction of the single European currency and Y2K	–	–	(9)
Contribution by French banks to the Compensation Fund and to"Fondation du Souvenir des victimes de la Shoah"	–	–	(2)

(1) See note 1. A reversal for an equivalent amount from the General Reserve for Banking Risks was recognized in the accounts at December 31, 2002, December 31, 2003 and December 31, 2004. (2) The accounting treatment of income invoiced for maintenance services provided in connection with leasing activities aims to show a constant margin on these products in relation to the expenses incurred, over the duration of the leasing contract. The harmonization of the models used within the Group to calculate income to be deferred under this treatment resulted in a change in this estimate. The impact of this change was recognized in the form of an Exceptional loss of EUR 20 million in the first half of 2004, and the deferred tax income relative to this expense was booked under Income tax in the amount of EUR 7 million.

Note 37

Income tax

In millions of euros at December 31	2004	2003	2002
Current taxes	(1,341)	(1,194)	(767)
Deferred taxes	(57)	33	118
Total (1)	(1,398)	(1,161)	(649)

(1) The reconciliation of the difference between the Group's normative tax rate and its effective tax rate breaks down as follows:

In millions of euros at December 31	2004	2003	2002
Income before tax and net income from companies accounted for by the equity method	5,007	4,240	2,447
Normal tax rate applicable to French companies(including 3% and 3.3% tax surcharges)	35.4%	35.4%	35.4%
Permanent differences	– 0.5%	– 2.5%	– 5.7%*
Differential on items taxed at reduced rate	– 1.1%	– 0.7%	2.7%
Tax rate differential on profits taxed outside France	– 3.3%	– 3.4%	– 5.2%
Impact of non-deductible losses for the period and use of losses carried forward	– 2.6%	– 1.4%	– 0.6%*
Effective tax rate	27.9%	27.4%	26.6%

* Amounts restated in relation to those given in 2002 annual report.

Note 38

Income statement by core business

		RetailBanking			Global Investment& ManagementServices			Corporate& InvestmentBanking			CorporateCenter			Group
In millions of eurosat December 31	2004	2003	2002	2004	2003	2002	2004	2003	2002	2004	2003	2002	2004	2003	2002
Net banking income	9,685	8,980	8,447	2,266	1,983	1,982	4,697	4,734	4,365	(232)	(60)	(221)	16,416	15,637	14,573
Operating expenses	(6,346)	(5,983)	(5,694)	(1,631)	(1,511)	(1,480)	(2,887)	(2,913)	(3,139)	(103)	(161)		(213) (10,967) (10,568) (10,526)
Gross operatingincome	3,339	2,997	2,753	635	472	502	1,810	1,821	1,226	(335)	(221)	(434)	5,449	5,069	4,047
Cost of riskNet incomefrom companiesaccounted for by	(589)	(647)	(650)	(8)	(13)	(14)	60	(510)	(720)	(4)	(56)	83	(541)	(1,226)	(1,301)
the equity methodNet incomefrom long-term	5	13	14	–	–	–	28	17	18	9	13	16	42	43	48
investmentsEarnings beforeexceptional itemsand tax	332,788	62,369	212,138	2629	(10)449	(9)479	161,914	271,355	24548	68(262)	374110	(335)(670)	1195,069	3974,283	(299)2,495
Exceptional items	–	–	–	–	–	–	–	–	–	(48)	(46)	(170)	(48)	(46)	(170)
Income taxAmortization	(955)	(805)	(723)	(193)	(138)	(153)	(449)	(295)	(57)	199	77	284	(1,398)	(1,161)	(649)
of goodwillNet reversal fromGeneral Reservefor Banking Risks	––	––	––	––	––	––	––	––	––	(186)28	(217)(104)	(184)159	(186)28	(217)(104)	(184)159
Net income before
minority interests	1,833	1,564	1,415	436	311	326	1,465	1,060	491	(269)	(180)	(581)	3,465	2,755	1,651
Minority interests	(218)	(187)	(172)	(44)	(21)	(16)	(6)	(8)	(21)	(72)	(47)	(45)	(340)	(263)	(254)
Net income	1,615	1,377	1,243	392	290	310	1,459	1,052	470	(341)	(227)	(626)	3,125	2,492	1,397

The principles and methodology for determining results by core business are detailed in the Management Report.

Results by core business have been restated in relation to those given in the 2002 and 2003 annual reports due notably to internal transfers.

Note 39 Geographical breakdown of net banking income*

In millions of euros at December 31	France	Europe	Americas	Asia	Africa	Oceania	Total
Net interest and similar income (1)	2,050	2,357	1,496	65	346	99	6,413
Net fee income	3,085	839	998	153	168	26	5,269
Net income from financial transactions	3,558	314	(34)	350	33	(4)	4,217
Other net operating income	258	233	5	4	18	(1)	517
Net banking income	8,951	3,743	2,465	572	565	120	16,416

* Geographical regions in which companies recording income are located.

(1) Including dividend income and net income from lease financing and similar agreements.

Note 40

Companies included in the consolidation scope

				Group		Group
				ownership interest		voting interest
At December 31	Country	Method*	2004	2003	2004	2003
France
Banks
Banque de Polynésie	France	FULL	80.00	80.00	80.00	80.00
Barep	France	FULL	100.00	100.00	100.00	100.00
BFCOI	France	FULL	50.00	50.00	50.00	50.00
Calif	France	FULL	100.00	100.00	100.00	100.00
Crédit du Nord (1)	France	FULL	80.00	80.00	80.00	80.00
Génébanque	France	FULL	100.00	100.00	100.00	100.00
Groupama Banques	France	PROP	40.00	40.00	40.00	40.00
SG Calédonienne de Banque	France	FULL	100.00	100.00	100.00	100.00
SG de Banque aux Antilles	France	FULL	100.00	100.00	100.00	100.00
Financial companies
Barep Gestion	France	FULL	100.00	100.00	100.00	100.00
Euro VL (1)	France	FULL	100.00	100.00	100.00	100.00
IEC	France	FULL	100.00	100.00	100.00	100.00
Lyxor Asset Management	France	FULL	100.00	100.00	100.00	100.00
Lyxor International Asset Management	France	FULL	100.00	100.00	100.00	100.00
Lyxor Strategium N° 1 (2)	France	FULL	100.00	0	100.00	0
Nofirec (1)	France	FULL	100.00	100.00	100.00	100.00
Pargesfonds	France	FULL	100.00	100.00	100.00	100.00
Primafair SAS	France	FULL	100.00	100.00	100.00	100.00
SG Asset Management	France	FULL	100.00	100.00	100.00	100.00
SGAM AI	France	FULL	100.00	100.00	100.00	100.00
SGAM Finance (1)	France	FULL	100.00	100.00	100.00	100.00
SGAM HDG Investment (3)	France	FULL	100.00	–	100.00	–
SGOP (4)	France	FULL	–	100.00	–	100.00
Specialized financing
Airbail	France	FULL	100.00	100.00	100.00	100.00
Ipersoc SAS	France	FULL	100.00	100.00	100.00	100.00
Bull Finance	France	FULL	51.35	51.35	51.35	51.35
Cafirec	France	FULL	100.00	100.00	100.00	100.00
Cofranteg	France	FULL	100.00	100.00	100.00	100.00
Compagnie Générale de Location d'Équipements (1)	France	FULL	99.73	99.73	99.73	99.73
Dalarec	France	FULL	100.00	100.00	100.00	100.00
Diebold Computer Leasing	France	FULL	100.00	100.00	100.00	100.00
Evalparts (2)	France	FULL	100.00	–	100.00	–
Fenwick Lease	France	FULL	100.00	100.00	100.00	100.00
Fontanor (1)	France	FULL	100.00	100.00	100.00	100.00
Franfinance (1)	France	FULL	99.99	99.99	99.99	99.99
Franfinance Location	France	FULL	99.99	99.99	100.00	100.00
French Supermarkets 1 (2)	France	FULL	100.00	–	100.00	–
Génécal	France	FULL	89.08	75.01	89.08	75.01
Génécomi	France	FULL	56.52	72.43	56.52	72.43
Haoroa SAS (2)	France	FULL	100.00	–	100.00	–
Linden SAS	France	FULL	100.00	100.00	100.00	100.00
Locaplan SA (6)	France	FULL	–	100.00	–	100.00
Orpavimob SA	France	FULL	100.00	100.00	100.00	100.00
Promopart	France	FULL	100.00	100.00	100.00	100.00

* FULL: full consolidation - PROP: proportionate consolidation - EQUITY: equity method.

				Group		Group
				ownership interest		voting interest
At December 31	Country	Method*	2004	2003	2004	2003
Rusfinance SAS (2)	France	FULL	51.01	–	51.01	–
Sagem Lease (2)	France	FULL	100.00	–	100.00	–
SCP Clémence	France	FULL	100.00	100.00	100.00	100.00
SCP Cygne	France	FULL	100.00	100.00	100.00	100.00
SCP de la Prose	France	FULL	100.00	100.00	100.00	100.00
SCP Muscade	France	FULL	100.00	100.00	100.00	100.00
SCP Philibert	France	FULL	100.00	100.00	100.00	100.00
SCP Salomé	France	FULL	100.00	100.00	100.00	100.00
SG Services	France	FULL	100.00	100.00	100.00	100.00
SNC Athena Investissements	France	FULL	100.00	100.00	100.00	100.00
SNC Cofininvest	France	FULL	100.00	100.00	100.00	100.00
SNC Distinvest	France	FULL	100.00	100.00	100.00	100.00
SNC Finovadis	France	FULL	100.00	100.00	100.00	100.00
SNC Fininva	France	FULL	100.00	100.00	100.00	100.00
SNC Paris Strasbourg	France	FULL	100.00	100.00	100.00	100.00
SNC Financières Valmy Investissements	France	FULL	100.00	100.00	100.00	100.00
SNC Sirius (2)	France	FULL	100.00	–	100.00	–
Sofinabail	France	FULL	100.00	100.00	100.00	100.00
SAS IPF	France	FULL	100.00	100.00	100.00	100.00
Sofom	France	FULL	100.00	100.00	100.00	100.00
Sofrafi	France	FULL	100.00	100.00	100.00	100.00
Sogéfimur	France	FULL	100.00	100.00	100.00	100.00
Sogéfinancement	France	FULL	100.00	100.00	100.00	100.00
Sogéfinerg	France	FULL	100.00	100.00	100.00	100.00
Sogéga PME	France	FULL	100.00	100.00	100.00	100.00
Sogelease France	France	FULL	100.00	100.00	100.00	100.00
Solocvi	France	FULL	100.00	100.00	100.00	100.00
Temsys (1)	France	FULL	100.00	100.00	100.00	100.00
Valmyfin	France	FULL	100.00	100.00	100.00	100.00
Varoner 2	France	FULL	100.00	100.00	100.00	100.00
Portofolio management
Aurelec	France	FULL	100.00	100.00	100.00	100.00
Ezépart	France	FULL	100.00	100.00	100.00	100.00
Finareg	France	FULL	100.00	100.00	100.00	100.00
Finecorp	France	FULL	100.00	100.00	100.00	100.00
Fonvalor2	France	FULL	100.00	100.00	100.00	100.00
Geforpat	France	FULL	100.00	100.00	100.00	100.00
Géné Act 1	France	FULL	100.00	100.00	100.00	100.00
Généfinance	France	FULL	100.00	100.00	100.00	100.00
SG Financial Services Holding (10)	France	FULL	100.00	100.00	100.00	100.00
Généinvestissement (7)	France	FULL	–	100.00	–	100.00
Généplus (7)	France	FULL	–	100.00	–	100.00
Généval	France	FULL	100.00	100.00	100.00	100.00
Geninfo	France	FULL	100.00	100.00	100.00	100.00
Libécap	France	FULL	100.00	100.00	100.00	100.00
Megaval	France	FULL	100.00	100.00	100.00	100.00
Salvépar (1)	France	FULL	51.42	51.42	51.42	51.42
SCI Foncière Défense	France	FULL	99.99	99.99	100.00	100.00
SG Capital Développement	France	FULL	100.00	100.00	100.00	100.00

* FULL: full consolidation - PROP: proportionate consolidation - EQUITY: equity method.

SOCIÉTÉ GÉNÉRALE GROUP - 2004 ANNUAL REPORT

				Group		Group
				ownership interest		voting interest
At December 31	Country	Method*	2004	2003	2004	2003
SGOP Holding (4)	France	FULL	–	100.00	–	100.00
SHTV Holding	France	FULL	100.00	100.00	100.00	100.00
Sivalparts	France	FULL	100.00	100.00	100.00	100.00
Sogéfim	France	FULL	100.00	100.00	100.00	100.00
Sogénal Participations	France	FULL	100.00	100.00	100.00	100.00
Sogéparts	France	FULL	100.00	100.00	100.00	100.00
Sogéparticipations (ex-Sogénal) (1)	France	FULL	100.00	100.00	100.00	100.00
Sogéplus (7)	France	FULL	100.00	100.00	100.00	100.00
Soginnove	France	FULL	100.00	100.00	100.00	100.00
Sté Rue Edouard-VII	France	FULL	99.91	99.91	99.91	99.91
Valminco (4)	France	FULL	–	100.00	–	100.00
Vouric	France	FULL	100.00	100.00	100.00	100.00
Brokers
Fimat Banque	France	FULL	100.00	100.00	100.00	100.00
Fimat SNC	France	FULL	100.00	100.00	100.00	100.00
Boursorama (1) (5)	France	FULL	71.03	71.01	71.03	71.01
SG Énergie (1)	France	FULL	100.00	100.00	100.00	100.00
Gaselys	France	PROP	49.00	49.00	49.00	49.00
Clickoptions	France	FULL	100.00	100.00	100.00	100.00
SG Euro CT	France	FULL	100.00	100.00	100.00	100.00
SG Options Europe	France	FULL	100.00	100.00	100.00	100.00
SG Securities Paris	France	FULL	100.00	100.00	100.00	100.00
Real estate and real estate financing
Coprim (6)	France	FULL	–	100.00	–	100.00
Galybet	France	FULL	100.00	100.00	100.00	100.00
Généfim (1)	France	FULL	100.00	100.00	100.00	100.00
Généfimmo (1)	France	FULL	100.00	100.00	100.00	100.00
Patriges Grace Church (4)	France	FULL	–	100.00	–	100.00
SFCC (4)	France	FULL	–	99.99	–	99.99
Sogébail	France	FULL	45.33	44.26	47.11	46.79
Sogéprom (1)	France	FULL	100.00	77.56	100.00	69.99
Sophia (1) (8)	France	EQUITY	–	25.20	–	25.20
Sophia-bail	France	FULL	51.00	63.35	51.00	51.00
Services
CGA	France	FULL	100.00	100.00	100.00	100.00
ECS (1)	France	FULL	100.00	100.00	100.00	100.00
Parel	France	FULL	100.00	100.00	100.00	100.00
Socogéfi	France	FULL	100.00	100.00	100.00	100.00
Group real estate management companies
CFM (1)	France	FULL	100.00	100.00	100.00	100.00
Eléaparts	France	FULL	100.00	100.00	100.00	100.00
Génégis 1	France	FULL	100.00	100.00	100.00	100.00
Génégis 2	France	FULL	100.00	100.00	100.00	100.00
Génévalmy	France	FULL	100.00	100.00	100.00	100.00
SC Alicante 2000	France	FULL	71.52	71.52	100.00	100.00
SC Chassagne 2000	France	FULL	71.52	71.52	100.00	100.00
SCI Opéra 72	France	FULL	99.99	99.99	100.00	100.00
SI 29 Haussmann	France	FULL	100.00	100.00	100.00	100.00
Société Immobilière de Strasbourg	France	FULL	100.00	100.00	100.00	100.00

* FULL: full consolidation - PROP: proportionate consolidation - EQUITY: equity method.

				Group		Group
At December 31	Country	Method*	2004	ownership interest2003	2004	voting interest2003
Sogé Colline Sud	France	FULL	100.00	100.00	100.00	100.00
Sogé Périval 1	France	FULL	100.00	100.00	100.00	100.00
Sogé Périval 2	France	FULL	100.00	100.00	100.00	100.00
Sogé Périval 3	France	FULL	100.00	100.00	100.00	100.00
Sogé Périval 4	France	FULL	100.00	100.00	100.00	100.00
Sogéfontenay	France	FULL	100.00	100.00	100.00	100.00
Soginfo (1)	France	FULL	100.00	100.00	100.00	100.00
STIP	France	FULL	99.99	99.99	100.00	100.00
Valminvest	France	FULL	100.00	100.00	100.00	100.00
Insurance
Génécar	France	FULL	100.00	100.00	100.00	100.00
Sogécap	France	FULL	100.00	100.00	100.00	100.00
Sogessur	France	FULL	65.00	65.00	65.00	65.00
Europe
Banks
Banca Romana Pentru Devzvoltare (1)	Romania	FULL	58.32	51.00	58.32	51.00
General Bank of Greece (1) (2)	Greece	FULL	50.01	–	50.01	–
Komercni Banka (1)	Czech Republic	FULL	60.35	60.35	60.35	60.35
SG Bank Nederland NV	Netherlands	FULL	100.00	100.00	100.00	100.00
SG Express Bank	Bulgaria	FULL	97.95	97.95	97.95	97.95
SG Hambros Bank Limited (1)	Great Britain	FULL	100.00	100.00	100.00	100.00
SG Private Banking (Suisse) (1)	Switzerland	FULL	77.62	77.62	77.62	77.62
SG Serbie Bank (2)	Serbia	FULL	100.00	–	100.00	–
SG Vostok (1)	Russia	FULL	100.00	100.00	100.00	100.00
SGBT Luxembourg (1)	Luxembourg	FULL	100.00	100.00	100.00	100.00
SGBT Monaco	Monaco	FULL	100.00	100.00	100.00	100.00
SKB Banka (1)	Slovenia	FULL	99.58	99.58	99.58	99.58
Société Générale Cyprus Ltd	Cyprus	FULL	51.00	51.00	51.00	51.00
Sogéparticipations Belgique (1)	Belgium	FULL	100.00	100.00	100.00	100.00
Financial companies
Euro-VL Luxembourg	Luxembourg	FULL	100.00	100.00	100.00	100.00
SG Wertpapierhandelsgesellschaft Mbh (1)	Germany	FULL	100.00	100.00	100.00	100.00
Horizon Equity Sarl (1)	Luxembourg	FULL	100.00	100.00	100.00	100.00
Intersoge (9)	Switzerland	FULL	–	100.00	–	100.00
Lightning Finance Company Ltd	Ireland	FULL	51.00	51.00	51.00	51.00
Lyxor Master Funds	Jersey	FULL	100.00	100.00	100.00	100.00
SG Acceptance	Netherlands	FULL	100.00	100.00	100.00	100.00
SG Asset Management Group Ltd (1)	Great Britain	FULL	100.00	100.00	100.00	100.00
SGAM Iberia	Spain	FULL	100.00	100.00	100.00	100.00
SG Effekten	Germany	FULL	100.00	100.00	100.00	100.00
SG Finance Ireland	Ireland	FULL	100.00	100.00	100.00	100.00
SG Financial Product Cyprus (4)	Cyprus	FULL	–	100.00	–	100.00
SG Investment UK Ltd (1)	Great Britain	FULL	100.00	100.00	100.00	100.00
SG Russel Asset Management	Ireland	PROP	50.00	50.00	50.00	50.00
SG Securities London	Great Britain	FULL	100.00	100.00	100.00	100.00
Specialized financing
Axus Belgium (1)	Belgium	FULL	100.00	100.00	100.00	100.00
Axus Danmark A/S	Denmark	FULL	100.00	100.00	100.00	100.00

* FULL: full consolidation - PROP: proportionate consolidation - EQUITY: equity method.

SOCIÉTÉ GÉNÉRALE GROUP - 2004 ANNUAL REPORT

				Group		Group
				ownership interest		voting interest
At December 31	Country	Method*	2004	2003	2004	2003
Axus Finland Oy	Finland	FULL	100.00	100.00	100.00	100.00
Axus Italiana SRL	Italy	FULL	100.00	100.00	100.00	100.00
Axus Nederland BV	Netherlands	FULL	100.00	100.00	100.00	100.00
Axus Norge AS	Norway	FULL	100.00	100.00	100.00	100.00
Axus Sverige AB	Sweden	FULL	100.00	100.00	100.00	100.00
Axus UK Limited (6)	Great Britain	FULL	–	100.00	–	100.00
Hertz Lease de Espana SA (6)	Spain	FULL	–	100.00	–	100.00
Montalis Investment BV (2)	Netherlands	FULL	100.00	–	100.00	–
Promopart SNC	Luxembourg	FULL	100.00	100.00	100.00	100.00
Sogega Pme SNC	Luxembourg	FULL	100.00	100.00	100.00	100.00
Adria Leasing Spa (GEFA-ALD Group)	Italy	FULL	100.00	100.00	100.00	100.00
ALD Autoleasing GmbH (GEFA-ALD Group) (1)	Germany	FULL	100.00	92.59	100.00	92.59
ALD Automotive Group PLC (GEFA-ALD Group) (1)	Great Britain	FULL	100.00	100.00	100.00	100.00
ALD International GmbH	Germany	FULL	100.00	100.00	100.00	100.00
ALD International SA	Germany	FULL	100.00	100.00	100.00	100.00
ALD Portugal	Portugal	FULL	100.00	100.00	100.00	100.00
Amber	Great Britain	FULL	100.00	100.00	43.80	100.00
ALD Automotive SA (Spain) (1)	Spain	FULL	100.00	100.00	100.00	100.00
SG Factoring Spa	Italy	FULL	100.00	100.00	100.00	100.00
Franfinance Leasing Italia Spa (GEFA-ALD Group)	Italy	FULL	100.00	100.00	100.00	100.00
SGEF SA & CO KG	Germany	FULL	100.00	100.00	100.00	100.00
FRANFINANCE Czech Republic s.r.o.	Czech Republic	FULL	100.00	100.00	100.00	100.00
Franfinance Polska Sp zoo (GEFA-ALD Group)	Poland	FULL	99.01	99.01	99.01	99.01
Fiditalia Spa	Italy	FULL	100.00	100.00	100.00	100.00
Fraer Leasing Spa (GEFA-ALD Group)	Italy	FULL	67.75	67.75	67.75	67.75
Gefa Gesellschaft Abstatzfinanzierung
(GEFA-ALD Group)	Germany	FULL	100.00	100.00	100.00	100.00
Gefa Leasing GmbH (GEFA-ALD Group)	Germany	FULL	100.00	100.00	100.00	100.00
ALD Czech Republic	Czech Republic	FULL	100.00	100.00	100.00	100.00
Locat Rent S.P.A	Italy	PROP	50.00	50.00	50.00	50.00
OOO Rusfinance (2)	Russia	FULL	51.01	–	100.00	–
SGEF International GmbH (2)	Germany	FULL	100.00	–	100.00	–
SGEF Schweitz AG (2)	Switzerland	FULL	100.00	–	100.00	–
SG Finans AS Norway (2)	Norway	FULL	100.00	–	100.00	–
SG Holding de Valores y Participaciones	Spain	FULL	100.00	100.00	100.00	100.00
Sogelease BV Nederland	Netherlands	FULL	100.00	100.00	100.00	100.00
Brokers
Fimat Switzerland AG (9)	Switzerland	FULL	–	100.00	–	100.00
Fimat London branch	Great Britain	FULL	100.00	100.00	100.00	100.00
Fimat Frankfurt branch	Germany	FULL	100.00	100.00	100.00	100.00
Fimat Madrid branch	Spain	FULL	100.00	100.00	100.00	100.00
Insurance
Généras	Luxembourg	FULL	100.00	100.00	100.00	100.00
Inora Life	Ireland	FULL	100.00	100.00	100.00	100.00
Komercni Pojistovna	Czech Republic	FULL	60.35	60.35	100.00	60.35
Meteo Transformer (9)	Jersey	PROP	–	50.00	–	50.00
Sogelife	Luxembourg	FULL	100.00	100.00	100.00	100.00

* FULL: full consolidation - PROP: proportionate consolidation - EQUITY: equity method.

				Group		Group
				ownership interest		voting interest
At December 31	Country	Method*	2004	2003	2004	2003
Africa and the Middle-East
Banks
BFV-SG (Madagascar)	Madagascar	FULL	70.00	70.00	70.00	70.00
National SG Bank SAE	Egypt	FULL	54.33	54.33	54.33	54.33
SG Banque au Liban (1)	Lebanon	FULL	50.00	50.00	50.00	50.00
SG Banque en Guinée	Guinea	FULL	52.94	52.94	52.94	52.94
SG Banques au Sénégal	Senegal	FULL	57.73	57.73	57.73	57.73
SG Banques en Côte-d'Ivoire (1)	Côte d'Ivoire	FULL	68.20	56.63	68.20	56.63
SG Marocaine de Banques (1)	Morocco	FULL	51.91	51.91	51.91	51.91
SGB Cameroun	Cameroon	FULL	58.08	58.08	58.08	58.08
SSB Bank Ghana	Ghana	FULL	51.00	51.00	51.00	51.00
United Arab Bank	United Arab Emirates	EQUITY	20.00	20.00	20.00	20.00
Union International de Banque	Tunisia	FULL	52.32	52.00	52.32	52.00
Specialized financing
Sogelease Egypt (2)	Egypt	FULL	61.73	–	80.00	–
ALD Automotive Maroc (3)	Morocco	FULL	42.79	–	50.00	–
Sogelease Maroc	Morocco	FULL	71.15	71.15	100.00	100.00
Eqdom	Morocco	FULL	44.64	44.64	53.61	53.61
Insurance
La Marocaine Vie	Morocco	FULL	73.44	70.15	87.07	82.83
The Americas
Banks
Banco Société Générale SA	Argentina	FULL	99.53	99.53	99.45	99.54
Banco Société Générale Brazil SA (1)	Brazil	FULL	100.00	100.00	100.00	100.00
SG Canada (1)	Canada	FULL	100.00	100.00	100.00	100.00
Financial companies
SG Americas Inc. (1)	United States	FULL	100.00	100.00	100.00	100.00
SG Capital Trust (1)	United States	FULL	–	–	100.00	100.00
SG Cowen Asset Management	United States	FULL	100.00	100.00	100.00	100.00
SG Warrants Limited	United States	FULL	100.00	100.00	100.00	100.00
SocGen Real Estate Company LLC	United States	FULL	50.31	50.31	100.00	100.00
TCW Group (1)	United States	FULL	66.54	60.90	86.83	60.90
Turquoise	Cayman Islands	FULL	100.00	100.00	100.00	100.00
Brokers
Fimat Canada Inc.	Canada	FULL	100.00	100.00	100.00	100.00
Fimat USA Inc.	United States	FULL	100.00	100.00	100.00	100.00
ServicesFimat Facilities Management	United States	FULL	100.00	100.00	100.00	100.00
Specialized financing
Cousto Investments LP	United States	FULL	100.00	100.00	55.00	55.00
Makatea JV Inc.	United States	FULL	100.00	100.00	60.00	60.00
Mehetia Inc.	United States	FULL	100.00	100.00	51.00	51.00
Rexus LLC (2)	United States	FULL	100.00	–	70.83	–
SG Ariki Inc. (1)	United States	FULL	100.00	100.00	100.00	100.00
SG Astro Finance LP	United States	FULL	100.00	100.00	100.00	100.00

* FULL: full consolidation - PROP: proportionate consolidation - EQUITY: equity method.

SOCIÉTÉ GÉNÉRALE GROUP - 2004 ANNUAL REPORT

				Group		Group
				ownership interest		voting interest
At December 31	Country	Method*	2004	2003	2004	2003
SG Astro Finance Trust	United States	FULL	100.00	100.00	100.00	100.00
SG Constellation Canada Ltd (2)	Canada	FULL	100.00	–	100.00	–
SG Equity Finance LLC (2)	United States	FULL	100.00	–	100.00	–
SG Finance Inc.	United States	FULL	100.00	100.00	100.00	100.00
SG Preferred Capital III LLC (1)	United States	FULL	100.00	100.00	100.00	100.00
Sorbier Investment Corp	United States	FULL	100.00	100.00	60.00	60.00
Surzur Overseas Ltd	Cayman Islands	FULL	100.00	100.00	100.00	100.00
Portfolio management
Sofital	Argentina	FULL	99.90	99.90	99.90	100.00
Asia and Oceania
Banks
Bank SG Indonesia (9)	Indonesia	FULL	–	100.00	–	100.00
SG Australia Holdings (1)	Australia	FULL	100.00	100.00	100.00	100.00
SG Private Banking (Japan) Ltd	Japan	FULL	100.00	100.00	100.00	100.00
SG Securities North Pacific	Japan	FULL	100.00	100.00	100.00	100.00
Financial companies
Asia Credit Ltd (1) (8)	Thailand	EQUITY	–	36.05	–	36.05
SG Asia (Singapore) Ltd (4)	Singapore	FULL	–	100.00	–	100.00
SG Asset Management Singapore Ltd	Singapore	FULL	100.00	95.75	100.00	100.00
SGAM Japan	Japan	FULL	100.00	95.00	100.00	95.00
Société Générale Asia Ltd (Hong Kong)	Hong Kong	FULL	100.00	100.00	100.00	100.00
Sogeko	South Korea	PROP	41.35	41.35	42.15	42.15
Onyx Trust	South Korea	FULL	100.00	100.00	100.00	100.00
Specialized financing
Sogelease Malaysia (1)	Malaysia	FULL	50.00	50.00	50.00	50.00
Portfolio management
SG Asset Management North Pacific	Japan	FULL	100.00	100.00	100.00	100.00
Brokers
Fimat Asia Pte Limited	Singapore	FULL	100.00	100.00	100.00	100.00
Fimat Futures Hong Kong	Hong Kong	FULL	100.00	100.00	100.00	100.00
SG Securities Asia Int. Holdings (1)	Singapore	FULL	100.00	100.00	100.00	100.00
Succursale Fimat Sydney	Australia	FULL	100.00	100.00	100.00	100.00
(1) Companies carrying out sub-consolidation.(2) Consolidated for the first time in 2004.

(3) Entities previously sub-consolidated and now reporting individually.

(4) Entities deconsolidated during 2004.

(5) Merger of Fimatex Sa, Finance Net, Fimatex SG and Selftrade.

(6) Entities previously reporting individually, now sub-consolidated.

(7) Dissolution of Généplus and Généinvestissement by a merger of assets with Sogéplus.

(8) Entities sold in 2004.

(9) Entities wound up in 2004.

(10) Name change, formerly Genefitec.

Special purpose vehicles

TOBP	Arbitrage vehicle	United States	FULL

* FULL: full consolidation - PROP: proportionate consolidation - EQUITY: equity method.

Report of the Statutory Auditors on the consolidated accounts

Year ended December 31, 2004

This is a free translation into English of the Statutory Auditors' report issued in the French language and is provided solely for the convenience of English speaking readers. This report includes information specifically required by French law in all audit reports, whether qualified or not, and this is presented below the opinion on the financial statements. This information includes explanatory paragraphs discussing the auditors' assessment of certain significant accounting and auditing matters. These assessments were considered for the purpose of issuing an audit opinion on the consolidated financial statements taken as a whole and not to provide separate assurance on individual account captions or on information taken outside of the consolidated financial statements. The report also includes information relating to the specific verification of information on the group management.

This report, together with the Statutory Auditors' report addressing financial and accounting information in the Chairman's report on internal control, should be read in conjunction with, and construed in accordance with French law and French professional auditing standards.

To the shareholders of Société Générale

In compliance with the assignment entrusted to us by your shareholders' meeting, we have audited the accompanying consolidated financial statements of Société Générale for the year ended December 31, 2004.

These consolidated financial statements have been approved by the Board of Directors. Our responsibility is to express an opinion on these annual accounts based on our audit.

I. Opinion on the consolidated statements

We conducted our audit in accordance with professional standards applicable in France. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statements presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the consolidated financial statements give a true and fair view of the assets, liabilities, financial position and results of the consolidated group of companies in accordance with the accounting rules and principles applicable in France.

II. Justification of assessments

In accordance with the requirements of article L. 225-235 of the French Company Law (Code de commerce) relating to the justification of our assessments, we bring to your attention the following matters: • As detailed in note 1 to the consolidated financial statements, your company records provisions to cover the credit risks inherent to its activities. We have reviewed the procedures implemented by the Management for identifying and assessing these risks and determining the amount of provisions considered as necessary.

• As detailed in note 1 to the consolidated financial statements, your Company uses internal models to value financial instruments that are not listed on organised markets. As such, we have reviewed the control procedures related to the models dedicated to the determination of the parameters used and the inclusion of the risks associated to these instruments.

• In its current year-end process, significant accounting estimates are performed by the Group related in particular to the value of the nonconsolidated investments in subsidiaries, the recovery of deferred tax assets and the evaluation of goodwill and pension and retirement liabilities. We have reviewed the underlying assumptions and verified that these accounting estimates are based on documented methods in accordance with the accounting principles described in Note 1 to the consolidated financial statements.

We carried out the assessment of the reasonableness of these estimates.

Our assessment on these matters were made in the context of the performance of our audit of the consolidated financial statements taken as a whole and therefore contributed to the formation of the opinion expressed in the first part of this report.

III. Specific verification

The Statutory Auditors

In accordance with professional standards applicable in France, we have also verified the information given in the group management report. We have no matters to report regarding its fair presentation and conformity with the consolidated financial statements.

Neuilly-sur-Seine and Courbevoie, March 1 , 2005. 0

DELOITTE & ASSOCIES ERNST & YOUNG Audit

José-Luis Garcia Christian Mouillon

Parent Company financial statements

Summary balance sheet of Société Générale

In billions of euros at December 31	2004	2003	Change
ASSETS
Interbank and money market assets	69.0	65.8	3.2
Customer loans	142.5	127.5	15.0
Securitiesof which securities purchased under resale agreements	220.554.2	190.050.7	30.53.5
Other assetsof which option premiums	80.451.7	55.734.7	24.717.0
Long-term investments	1.2	1.2	0.0
Total assets	513.6	440.2	73.4
LIABILITIES AND SHAREHOLDERS' EQUITY
Interbank and money market liabilities (1)	192.2	161.9	30.3
Customer deposits	124.3	118.8	5.5
Bonds and subordinated debt (2)	14.2	14.1	0.1
Securitiesof which securities sold under repurchase agreements	83.444.4	73.337.4	10.17.0
Other liabilities and provisionsof which option premiums	82.453.2	56.634.7	25.818.5
Equity and general reserve for banking risksof which general reserve for banking risksof which shareholders' equity	17.10.316.8	15.50.315.2	1.60.01.6
Total liabilities and shareholders' equity	513.6	440.2	73.4

(1) Including negotiable debt instruments. - (2) Including undated subordinated capital notes.

As at December 31, 2004, the parent company's total assets and liabilities amounted to EUR 513.6 billion, up 16.7% on December 31, 2003. The development of its activities was reflected in the key balance sheet figures.

■ The increase in customer loans (+11.8%), which totaled EUR 142.5 billion at December 31, 2004, was essentially driven by the growth in short-term credit facilities (EUR +6.4 billion), loans to financial institutions (EUR +4.3 billion) and mortgage loans (EUR +3.6 billion). A notable rise of 12.9% was seen in loans to individual customers, fuelled primarily by the housing loan segment.

■ Securities carried on the assets side of the balance sheet, excluding securities purchased under resale agreements, stood at EUR 166.3 billion at December 31, 2004, up 19.4% on year-end 2003. This increase was notably due to growth in the trading portfolio (EUR +26.2 billion).

■ Premiums on the purchase of options were up EUR 17 billion on December 31, 2003 due to a rise in volumes. The same trend was witnessed in premiums on sales of options.

■ Customer deposits stood at EUR 124.3 billion at December 31, 2004, up EUR 5.5 billion (+4.6%) on December 31, 2003. This growth essentially reflects an increase in the term deposits of financial institutions (EUR +9.1 billion) and in special savings accounts deposits (EUR +1.8 billion), and a fall in business customer term deposits (EUR –5.3 billion).

■ Securities carried on the liabilities side of the balance sheet, excluding securities sold under repurchase agreements, totaled EUR 39 billion at December 31, 2004 (+8.6%). This growth principally stemmed from the rise in short sales of securities (EUR +3 billion).

■ Société Générale's funding strategy reflects the need to finance a growing balance sheet (+16.7% since December 2003), and is based on two fundamental principles: diversification of the sources of funding, and the matching of assets and liabilities according to maturity and currency in order to minimize exchange rate and transformation risks.

Société Générale parent company's funding comes from three main sources:

• stable resources, comprising shareholders' equity and subordinated debt, the fund for general banking risks and other reserves and provisions. These resources account for 22% of Société Générale's balance sheet funding;

• customer resources, in the form of deposits (EUR 124.3 billion) and repurchase agreements (EUR 25.2 billion) which total EUR 150 billion, or 30% of balance sheet funding;

• resources collected from the financial markets, through the issue of marketable debt securities (EUR 62.9 billion), interbank deposits (EUR 129 billion) or repurchase agreements (EUR 58.2 billion). These resources account for 48% of total balance sheet funding, or EUR 250 billion.

Société Générale intends to maintain this strategy to ensure balanced growth in its assets and liabilities.

				2004				2003
In millions of euros at December 31	France	04/03(%)	Inter-national	04/03(%)	SociétéGénérale	04/03(%)	France	Inter-national	SociétéGénérale
Net banking income	6,235	3.9	1,669	–2.2	7,904	2.6	5,998	1,707	7,705
Operating expenses	(4,947)	2.8	(929)	1.6	(5,876)	2.6	(4,811)	(914)	(5,725)
Gross operating income	1,288	8.5	740	–6.7	2,028	2.4	1,187	793	1,980
Cost of risk	(6)	–99.0	55	–150.9	49	–106.8	(613)	(109)	(722)
Operating income	1,282	123.4	795	16.2	2,077	65.1	574	684	1,258
Net income from long-terminvestments	182	159.1	1	–95.4	183	103.7	70	20	90
Operating income before tax	1,464	127.3	796	13.1	2,260	67.6	644	704	1,348
Exceptional items	–	–100.0	–	–	–	–100.0	43	–	43
Income tax	154	–27.4	(140)	22.1	14	–86.0	212	(115)	97
Net allocation to generalreserve for banking risks
and regulatory provisions	29	–127.9	–	–	29	–127.9	(104)	–	(104)
Net income	1,647	107.1	656	11.3	2,303	66.4	795	589	1,384

Summary income statement of Société Générale

Parent company net income for the 2004 financial year stood at EUR 2,303 million, up 66.4% on 2003. The breakdown of results for Société Générale in France and abroad is given in the above table.

The principle changes in the income statement were as follows:

• Gross operating income came out at EUR 2,028 million, up 2.4% on 2003:

• Net banking income amounted to EUR 7,904 million, up 2.6% on 2003, reflecting mixed results:

• The French Networks turned in another excellent sales performance marked by:

• an increase in the average volume of savings under management as a result of the rise in the number of current accounts (+2.3%) and in customer deposits (+5.1%),

• exceptional inflows into life insurance products (+15.1%) and the successful launch of retirement savings accounts (71,000 PERP opened),

• steady growth in outstanding loans (notably with a 14% rise in outstanding mortgage loans),

• significant growth in service commissions (+6.1%);

– Revenues in Corporate & Investment Banking were boosted by excellent performances in equity derivatives, both in client-driven and proprietary activities. In a less favorable interest rate environment, revenues from treasury activities remained strong, although down slightly on the particularly high levels seen in 2003.

• Operating expenses totaled EUR 5,876 million, up 2.6% on 2003:
• the rise in the operating expenses of the French Networks was essentially linked to growth in activity and the continuing roll-out of the multi-channel banking platform;
• in Corporate & Investment Banking, operating expenses grew at a slightly lower rate than NBI.

■ The parent company wrote back EUR 49 million of provisions in 2004 (compared with a net allocation of EUR 722 million in 2003), due to a highly favorable credit risk environment and a number of internal factors: diversification of the business mix, improvement in risk management techniques and conservative risk provisioning in the past.

■ Net income from long-term investments came out at EUR 183 million in 2004. It included write-backs of provisions for certain equity investments and capital gains on disposals of equity investments.

■ Income tax in 2004 represented a tax gain of EUR 14 million compared with a gain of EUR 97 million in 2003.

■ A write-back was made from the fund for general banking risks to cover the various costs and provisions related to a fraud that concerned the former private client brokerage division of Cowen, a subsidiary of SG Americas. This activity, which was acquired with Cowen & Company in 1998, was sold in 2000.

Balance Sheet

Assets

In millions of euros at December 31	2004	2003	2002
Cash, due from central banks and post office accounts	1,810	2,468	1,546
Due from banks	99,080	88,619	70,842
Customer loans	164,475	152,784	143,883
Lease financing and similar agreements	278	135	110
Treasury notes and similar securities	30,921	23,532	22,592
Bonds and other debt securities	65,121	51,490	48,192
Shares and other equity securities	43,870	39,401	23,968
Affiliates and other long term securities	941	775	875
Investments in subsidiaries	23,651	22,954	19,821
Tangible and intangible fixed assets	1,173	1,193	1,258
Treasury stock	1,831	1,141	783
Accruals, other accounts receivable and other assets	80,451	55,714	52,862
Total	513,602	440,206	386,732

Liabilities and shareholders' equity

In millions of euros at December 31	2004	2003	2002
Due to central banks and post office accounts	388	424	698
Due to banks	147,485	124,352	92,665
Customer deposits	150,682	143,720	149,218
Securitized debt payables	63,844	51,734	40,963
Accruals, other accounts payable and other liabilities	116,028	88,565	74,174
Provisions for general risks and commitments	5,320	3,955	2,908
Subordinated debt and notes	12,785	11,979	11,575
General reserve for banking risks	284	312	207
Shareholders' equity
Common stock	556	548	538
Additional paid-in capital	6,048	5,698	5,388
Retained earnings	7,879	7,535	6,530
Net income	2,303	1,384	1,868
Sub-total	16,786	15,165	14,324
Total	513,602	440,206	386,732

Off-balance sheet items

In millions of euros at December 31	2004	2003	2002
Commitments received
Loan commitments received from banks	3,819	5,810 (1)	4,074 (1)
Guarantee commitments received from banks	33,826	28,178	29,419
Commitments received on securities	13,553	7,663	2,717
Foreign exchange transactions	350,968	284,774	313,651
Commitments granted
Loan commitments	94,517	90,140 (1)	85,840 (1)
Guarantee commitments	116,884	98,967	84,361
Commitments made on securities	11,450	9,195	3,594
Foreign exchange transactions	349,240	283,485	311,134
Forward financial instrument commitments	7,023,884	5,713,518	5,291,600

(1) Amounts restated in relation to those given in 2002 and 2003 annual reports.

Income statement

In millions of euros at December 31	2004	2003	2002
Net interest income from:
Transactions with banks	(1,055)	(571)	(448)
Transactions with customers	2,532	2,349	2,216
Bonds and other debt securities	112	304	551
Other interest and similar revenues	(224)	257	21
Net income from lease financing and similar agreements	14	6	8
Sub-total	1,379	2,345	2,348
Dividend income	1,157	1,050	1,292
Net interest and similar income	2,536	3,395	3,640
Net fee income	2,014	2,188	2,029
Net income from financial transactions	3,213	2,067	2,112
Other net operating income	141	55	123
Net banking income	7,904	7,705	7,904
Personnel expenses	(3,679)	(3,587)	(3,305)
Other operating expenses	(1,898)	(1,839)	(1,834)
Depreciation and amortization	(299)	(299)	(306)
Total operating expenses	(5,876)	(5,725)	(5,445)
Gross operating income	2,028	1,980	2,459
Cost of risk	49	(722)	(788)
Operating income	2,077	1,258	1,671
Net income from long-term investments	183	90	(301)
Operating income before tax	2,260	1,348	1,370
Exceptional items	–	43	(11)
Income tax (loss)	14	97	350
Net allocation to the general reserve
for banking risks and regulatory provisions	29	(104)	159
Net income	2,303	1,384	1,868

Changes in shareholders' equity

In millions of euros	CapitalStock	Additionalpaid-in-capital	Reserves,unappropriatedretainedearnings	Networth	Generalreserves forbankingrisks	Shareholders'equity
At December 31, 2002	538	5,388	8,398	14,324	207	14,531
Increase in capital stock	10	310	–	320	–	320
Net income for the period	–	–	1,384	1,384	–	1,384
Dividends paid (1)	–	–	(864)	(864)	–	(864)
Other movements (2)	–	–	1	1	105	106
At December 31, 2003	548	5,698	8,919	15,165	312	15,477
Increase in capital stock	8	350	–	358	–	358
Net income for the period	–	–	2,303	2,303	–	2,303
Dividends paid (3)	–	–	(1,031)	(1,031)	–	(1,031)
Other movements (2)	–	–	(9)	(9)	(28)	(37)
At December 31, 2004	556	6,048	10,182	16,786	284	17,070

(1) After elimination of treasury stock dividend: EUR 39.4 million.

(2) Reversals in the amount of EUR 45.6 million in 2003 and EUR 28 million in 2004 were made from the general reserve for banking risks to cover charges and allowances linked

to a fraud affecting Cowens's former client brokerage division. In addition, EUR 150 million was allocated to the general reserve for banking risks in 2003.

(3) After elimination of treasury stock dividend: EUR 65 million.

Five-Year financial summary of Société Générale

	2004	2003	2002	2001	2000
Financial position at year-end
Capital stock (in millions of euros) (1)	556	548	538	539	529
Number of outstanding shares (2)	445,153,159	438,434,749	430,170,265	431,538,522	423,248,418
Results of operations (in millions of euros)
Gross banking and other income (3)	22,403	18,943	21,261	23,251	23,874
Earnings before tax, depreciation, amortization,provisions, employee profit sharing
and general reserve for banking risks	3,296	2,667	3,298	3,210	2,485
Employee profit sharing	–	15	(1)	1	52
Income tax	(14)	(97)	(350)	(119)	253
Net income	2,303	1,384	1,868	2,007	2,266
Total dividends paid	1,469	1,096	903	891*	889
Earnings per share (in euros)
Earnings after tax but before depreciation,
amortization and provisions	7.44	6.27	8.48	7.71	5.15**
Net income	5.17	3.16	4.34	4.65	5.35**
Dividend paid per share	3.30	2.50	2.10	2.10	2.10**
Personnel
Number of employees	39,648	39,102	39,713	38,989	37,323
Total payroll (in millions of euros)	2,476	2,436	2,270	2,266	2,289
Employee benefits (Social Security and other)
(in millions of euros)	1,123	1,055	970	931	928

* After impact of the cancellation of 7,200,000 shares decided by the Board of Directors at its meeting of February 20, 2002,

** After the four-for-one stock split, the number of shares increased fourfold.

(1) In 2004, Société Générale increased its capital stock by EUR 8.4 million, with EUR 349.2 million of additional paid-in capital, as follows: • EUR 6.5 million, with EUR 296.4 million of additional paid-in capital, was the result of employees subscribing for shares under the Employee Share Ownership Plan.

• EUR 1.9 million, with EUR 52.8 million of additional paid-up capital, resulted from employees exercising options granted by the Board of Directors.

(2) At December 31, 2004, Société Générale's common stock comprised 445,153,159 shares with a nominal value of EUR 1.25 per share.

(3) Gross banking and other income is made up of interest income, dividend income, fee income, income from financial transactions and other operating income.

List of subsidiaries and affiliates

In thousands of euros or local currencies		Registered	Shareholders'equity other	Shareof capital		Book valueof shares held
Company/Head Office		capital(local currency)	than capital(local currency)	held(%)	Gross (in EUR)	Net (in EUR)
I - Information on investments with a book value in excess of 1% of Société Générale's capital
A) Subsidiaries (more than 50% owned by Société Générale)
Généval29, boulevard Haussmann - 75009 Paris - France	EUR	538,630	1,447,820	100.00	1,910,368	1,910,368
SG Americas Inc.1221 avenue of the Americas - New York 10020 - USA	USD		3,200,511	100.00	2,484,080	1,880,184
Généfinance29, boulevard Haussmann - 75009 Paris - France	EUR	1,600,000	251,470	100.00	1,736,024	1,736,024
Ipersoc12, rue de la Mare-à-Guillaume94210 Fontenay-sous-Bois - France	EUR	65	2,182,706	100.00	1,593,610	1,593,610
SG Asset Management17, cours Valmy - 92800 Puteaux - France	EUR	294,337	1,253,658	100.00	1,549,182	1,549,182
SG Financial Services Holding (ex-Généfitec)29, boulevard Haussmann - 75009 Paris - France	EUR	844,083	106,804	100.00	1,333,563	1,333,563
Linden17, cours Valmy - 92800 Puteaux - France	EUR	100	1,001,696	100.00	1,001,040	1,001,040
Ald International SA15, allée de l'Europe - 92110 Clichy-sur-Seine - France	EUR	550,038	50	100.00	804,000	804,000
Généfimmo29, boulevard Haussmann - 75009 Paris - France	EUR	392,340	41,047	100.00	651,732	651,732
SG Hambros LtdExchange House - Primrose St. - London EC2A 2HTUnited Kingdom	GBP	282,185	23,878	100,00	409,458	409,458
Soginfo29, boulevard Haussmann - 75009 Paris - France	EUR	232,303	33,576	100.00	265,797	265,797
SG Ariki Inc.Corporation Trust Center, 1209 Orange Street, WilmingtonNew Castel - Delaware - USA	USD	344,158	16,091	100.00	253,071	253,071
Valminvest29, boulevard Haussmann - 75009 Paris - France	EUR	248,877	(33,034)	100.00	249,426	249,426
Fiditalia SpaVia G. Ciardi, 9 - 20148 - Milan - Italy	EUR	63,278	132,621	100.00	224,318	224,318
Nofirec17, cours Valmy - 92800 Puteaux - France	EUR	202,929	20,634	100.00	223,227	223,227
SG Securities North PacificArk Mori Building - 13-32 Akasaka 1 - Chome, Minato+Ku107-6015 Tokyo - Japan	JPY	14,203,000	5,756,000	100.00	215,445	215,445
Génégis I29, boulevard Haussmann - 75009 Paris - France	EUR	192,900	3,699	100.00	196,055	196,055
Société Générale CanadaMontréal Québec H3B 3A7 - Canada	CAD	250,772	40,289	100.00	172,403	172,403
Fimat Banque SA50, boulevard Haussman - 75009 Paris - France	EUR	100,604	28,292	100.00	111,189	111,189

Unreimbursedloansand advancesmade by theCompany(in EUR)	Guaranteesgiven by theCompany(in EUR)	Revenuefor thelast fiscal year(local currency)	Net income(loss)for thelast fiscal year(local currency)	Dividendsreceivedby the Companyduringthe year(in EUR)	Remarks/revaluation difference
–	–	57,504	83,998	–
–	–	1,155,398	(49,867)	–	Capital = USD 1EUR 1 = USD 1.3621
4,195,760	–	348,286	189,197	101,000
–	–	90,190	87,203	–
–	–	617,560	189,649	117,925
2,222,450	–	472,382	492,006	–
–	–	55,456	48,644	24,909
–	–	N/S	336	–
60,000	–	24,853	55,122	22,640
–	–	128,838	12,471	–	EUR 1 = GBP 0.70505
–	2,000	25,088	10,565	–
–	–	58,647	13,900	–	EUR 1 = USD 1.3621
–	–	6,631	1,432	–
–	–	325,002	29,544	256
–	–	4	8,553	5,682	Of which 2004 interim dividend of 5,682
–	398,059	4,923,000	2,857,000	–	EUR 1 = JPY 139.65
–	14,134	160,155	1,251	–
–	–	215,702	31,471	–	EUR 1 = CAD 1.6416
–	22,025	57,213	25,752	22,100

SOCIÉTÉ GÉNÉRALE GROUP - 2004 ANNUAL REPORT

List of subsidiaries and affiliates

In thousands of euros or local currencies

		Registeredcapital	Shareholders'equity otherthan capital	Shareof capitalheld		Book valueof shares held
Company/Head Office		(local currency)	(local currency)	(%)	Gross (in EUR)	Net (in EUR)
Orpavimob SA29, boulevard Haussmann - 75009 Paris - France	EUR	104,700	6,309	100.00	104,700	104,700
SG Securities Asia Intl Hold Ltd41/F Edinburgh Tower - 15 Queen's Road Central, Hong Kong	USD	96,990	(36,256)	100.00	95,356	95,356
Société Immobilière 29 Haussmann29, boulevard Haussman - 75009 Paris - France	EUR	90,030	1,112	100.00	89,992	89,992
Compagnie Foncière de la Méditerranée29, boulevard Haussmann - 75009 Paris - France	EUR	76,627	2,121	100.00	155,837	79,692
Société Générale Finance (Ireland) Ltd31/32 Morisson Chambers, Nassau street - Dublin 2 - Ireland	EUR	77,454	9,491	100.00	78,302	78,302
Fontanor17, cours Valmy - 92800 Puteaux - France	EUR	40	72,114	100.00	73,582	73,582
Ezepart17, cours Valmy - 92800 Puteaux - France	EUR	45,040	7,273	100.00	45,057	45,057
Eléaparts29, boulevard Haussmann - 75009 Paris - France	EUR	42,040	(6,166)	100.00	48,070	37,836
SG Asia Ltd42/F Edinburgh Tower, 15 Queen's Road Central - Hong Kong	HKD	400,000	348,970	100.00	37,656	37,656
Banco SG BrazilRua Verbo Divino 1207, Châcara Santo Antonio - Sâo PauloCEP 04719-002 - Brazil	BRL	166,155	(54,724)	100.00	70,920	34,510
SG Wertpapierhandelsgesellschaft MbhMainze Landstrasse 36 - D60325 Frankfurt am Main - Germany	EUR	55	(46,498)	100.00	31,590	31,590
SG Algérie75, chemin Cheikh Bachir Ibrahimi, El-Biar - 16010 Algiers - Algeria DZD		1,597,840	–	100.00	25,196	25,196
Société Générale Australia Holding Ltd350, George Street - Sydney NSW 3000 - Australia	AUD	21,500	147,467	100.00	22,789	22,789
GéninfoLes Miroirs, Bt. C, 18, avenue d'Alsace92400 Courbevoie - France	EUR	18,524	31,177	100.00	20,477	20,477
SG Yugoslav Bank ADSTR Vladimira Popovica 3 Belgrade - Yugoslavia	CSD	1,396,951	80,530	100.00	20,131	20,131
SNC Sirius40-42, quai du Point-du-Jour92100 Boulogne-Billancourt - France	EUR	30	(4)	100.00	19,030	19,030
Inora Life Ltd (ex-Lyxor Life Ltd)6, Exchange Place, International Financial Services Center,Dublin 1 - Ireland	EUR	15,000	(2,899)	100.00	15,000	15,000
SG Énergie17, cours Valmy - 92800 Puteaux - France	EUR	13,000	1,916	100.00	14,785	14,785
Sogé Colline Sud29, boulevard Haussmann - 75009 Paris - France	EUR	14,250	798	100.00	14,483	14,483
Société Générale Bank Nederland NVMuseumplein 17 1071 DJ - Amsterdam - Netherlands	EUR	7,714	–	100.00	8,042	8,042

Unreimbursedloansand advancesmade by theCompany(in EUR)	Guaranteesgiven by theCompany(in EUR)	Revenuefor thelast fiscal year(local currency)	Net income(loss)for thelast fiscal year(local currency)	Dividendsreceivedby the Companyduringthe year(in EUR)	Remarks/revaluation difference
–	–	4,621	4,572	–
–	–	17,279	54,346	97,136	EUR 1 = USD 1.3621
–	–	7,643	2,043	1,050
–	–	4,719	1,989	897
–	–	7,681	5,887	5,700
–	–	–	19,106	–
–	–	783	1,001	479
–	–	2,073	2,151	–
–	–	284,332	112,953	–	EUR 1 = HKD 10.5881
–	–	188,086	(7,543)	–	EUR 1 = BRL 3.617738
–	–	204,487	19,223	–
–	20,000	96,290	27,840	–	EUR 1 = DZD 98.173358
–	–	–	14,291	59,851	EUR 1 = AUD 1.7459
–	–	621	560	1,690
–	17,020	1,777,257	337,400	–	EUR 1 = CSD 77.303
–	–	111,011	(17)	–
–	–	190,622	(350)	–
–	–	138	3,903	7,258
–	–	1,709	(441)	–
–	9,792	77,059	1,696	1,445

SOCIÉTÉ GÉNÉRALE GROUP - 2004 ANNUAL REPORT

List of subsidiaries and affiliates

In thousands of euros or local currencies

		Registeredcapital	Shareholders'equity otherthan capital	Shareof capitalheld		Book valueof shares held
Company/Head Office		(local currency)	(local currency)	(%)	Gross (in EUR)	Net (in EUR)
Soge Périval IV29, boulevard Haussmann - 75009 Paris - France	EUR	6,405	953	100.00	6,704	6,704
Société de la rue Edouard-VII29, boulevard Haussmann - 75009 Paris - France	EUR	11,396	737	99.87	59,612	12,293
SG Financial Inc.Corporation Trust Center, 1209 Orange Street, WilmingtonNew Castel - Delaware - USA	USD	2,030,000	6,548	99.70	1,485,941	1,485,941
Sogéfontenay17, cours Valmy - 92800 Puteaux - France	EUR	4,200	397	99.00	9,055	9,055
Société Générale Investments (UK) LtdSG House, 41 Tower Hill, EC3N 4SG - LondonUnited Kingdom	GBP	157,883	25,713	98.96	225,938	225,938
SG Expressbank92, Bld VI Varnentchik - 9000 Varna - Bulgaria	BGN	28,530	59,089	97.95	34,256	34,256
SKB BankaAdjovscina,4 - 1513 Ljubljana - Slovenia	SIT	12,649,200	46,026,469	97.43	219,593	219,593
SG Vostok5, Nikitsky Pereulok - 103009 Moscow - Russia	RUB	478,000	1,173,757	95.35	43,470	43,470
Soge Périval I29, boulevard Haussmann - 75009 Paris - France	EUR	7,701	1,027	94.98	7,313	7,313
Soge Périval III29, boulevard Haussmann - 75009 Paris - France	EUR	7,473	1,136	94.83	7,095	7,095
Soge Périval II29, boulevard Haussmann - 75009 Paris - France	EUR	7,816	1,091	94.75	7,402	7,402
Banque de PolynésieBd Pomare, BP 530 - Papeete - Tahiti - French Polynesia	XPF	1,380,000	4,333,085	80.00	12,560	12,560
Crédit du Nord28, place Rihour - 59800 Lille - France	EUR	740,263	293,124	79.99	584,255	584,255
Boursorama11, rue de Prony - 75848 Paris - France	EUR	27,311	115,854	71.03	300,705	254,088
BFV - SG14, Lalana Jeneraly Rabehevitra, BP 196, Antananarivo 101Madagascar	MGF	70,000,000	24,300,294	70.00	7,614	7,614
Société Générale de Banques en Côte-d'Ivoire5 & 7, avenue J. Anoma, 01 BP 1355 - Abidjan 01 - Côte-d'Ivoire	XAF	15,555,555	41,201,997	66.79	26,454	26,454
Sogessur2, rue Jacques-Daguerre - 92565 Rueil-Malmaison - France	EUR	25,500	(4,771)	65.00	72,730	9,315
Komercni BankaCentrala Na Prokope 33 - Postovni Prihradka 839114 07 Praha 1 - Czech Republic	CZK	19,004,926	6,808,703	60.35	1,218,767	1,218,767
Makatéa Inc.1221, avenue of the Americas - New York, NY 10020 - USA	USD	1,502,000	2,813	60.00	734,160	734,160
AIG Sorbier50, Danbury Road - Wiltom - USA	USD	1,500,000	2,622	60.00	588,063	588,063

loansand advancesmade by theCompany(in EUR)	Guaranteesgiven by theCompany(in EUR)	Revenuefor thelast fiscal year(local currency)	Net income(loss)for thelast fiscal year(local currency)	receivedby the Companyduringthe year(in EUR)	Remarks/revaluation difference
3,231	–	1,644	368	–
–	–	394	234	112	Difference = 16,509
–	2,037,552	626,456	12,213	77,532	EUR 1 = USD 1.3621
9,791	–	1,813	(120)	–
–	715,602	20,431	(28,900)	–	EUR 1 = GBP 0.70505
–	–	76,808	22,681	4,208	EUR 1 = BGN 1.9559
–	–	50,419,875	2,963,418	–	EUR 1 = SIT 239.76
–	187,209	780,722	(295,364)	–	EUR 1 = RUB 37.757412
3,322	–	1,816	407	–
3,299	–	1,781	416	–
3,298	–	1,803	417	–
–	70,669	8,896,163	1,556,376	8,160	Difference = 45EUR 1 = XPF 119.33174
–	3,852,051	2,288,297	233,855	88,825
–	–	101,106	10,494	–
–	9,080	188,818,471	54,092,992	1,329	EUR 1 = MGF 12,714.1
–	91,763	47,717,021	9,893,148	2,423	Difference = 5,166EUR 1 = XAF 655.957
5,126	–	87,295	(8,443)	–
–	250,616	30,466,074	8,727,623	145,731	EUR 1 = CZK 30.464EUR 1 = USD 1.3621
–		91,631	59,561	46,318	Of which 2004 interim dividend of 46,318
–	–	74,810	48,620	37,401	EUR 1 = USD 1.3621Of which 2004 interim dividend of 37,401

Unreimbursed Dividends

List of subsidiaries and affiliates

In thousands of euros or local currencies

		Registeredcapital	Shareholders'equity otherthan capital	Shareof capitalheld		Book valueof shares held
Company/Head Office		(local currency)	(local currency)	(%)	Gross (in EUR)	Net (in EUR)
Sogéparts29, boulevard Haussmann - 75009 Paris - France	EUR	17,600	4,689	60.00	11,253	11,253
Banque Roumaine de DéveloppementA, Doamnei street - 70016 Bucarest 3, Romania	ROL	4,181,408,000	9,430,903,000	58.32	213,226	213,226
Société Générale de Banques au CamerounRue Joss - Douala - Cameroon	XAF	6,250,000	20,287,996	58.08	16,940	16,940
Société Générale de Banques au Sénégal19, avenue Léopold Sédar Senghor - Dakar - Senegal	XAF	4,527,600	22,025,923	57.72	5,855	5,855
Généfim29, boulevard Haussmann - 75009 Paris - France	EUR	72,779	132,108	57.62	89,846	89,846
National Société Générale Bank5, rue Champollion - Cairo - Egypt	EGP	550,000	279,467	54.33	14,997	14,997
Union Internationale de Banques65, avenue Habib Bourguiba - 1000A Tunis - Tunisia	TND	106,000	59,409	52.33	87,282	87,282
Société Générale Marocaine de Banques55, boulevard Abdelmoumen - Casablanca - Morocco	MAD	1,170,000	1,223,988	51.91	71,866	71,866
Méhétia Inc.1105, North Market Street Wilmington - De 19 890,Delaware - USA	USD	2,559,917	5,461	51.00	1,101,360	1,101,360
Général Bank of Greece109, Messogion Avenue - 11510 Athens - Greece	EUR	240,642	(14,387)	50.01	125,143	125,143
Socgen Real Estate Company1221, avenue of the Americas - New York, NY 10020 - USA	USD	800,000	5,020	50.31	594,686	594,686
B) Affiliates (10 to 50% owned by Société Générale)
Société Générale Calédonienne de Banque56, rue de la Victoire - Noumea - New Caledonia	XPF	1,068,375	6,483,790	30.50	18,220	18,220
Banca SAICorso Galilei,12 - 10126 Turin - Italy	EUR	36,890	1,000	30.00	12,683	12,683
United Arab BankPo Box 3562 Abu Dhabi - United Arab Emirates	AED	338,912	147,970	20.00	13,390	13,390
Crédit Logement50, boulevard Sébastopol, 75003 Paris - France	EUR	1,253,974	63,717	13.50	171,036	171,036
Bank Muscat (SAOG)Po Box 134, Ruwi, Poste Code 112 - Oman	OMR	59,815	160,239	10.08	24,935	24,935
II - Information concerning other subsidiaries and affiliates
A) Subsidiaries not included in 1:
1) French subsidiaries					22,874	20,920
2) Foreign subsidiaries					392,211	243,124
B) Affiliates not included in 1:
1) French companies					25,617	5,569
2) Foreign companies					79,617	13,670

	loansand advancesmade by theCompany(in EUR)	Guaranteesgiven by theCompany(in EUR)	Revenuefor thelast fiscal year(local currency)	Net income(loss)for thelast fiscal year(local currency)	receivedby the Companyduringthe year(in EUR)	Remarks/revaluation difference
	–	–	2,343	1,434	2,759
	–	–	25,078,858,000	2,856,542,000	10,866	EUR 1 = ROL 39,390
	–	40,883	31,893,338	7,510,537	3,010	Difference = 1,675EUR 1 = XAF 655.957
	–	31,037	38,510,773	6,940,055	3,585	Difference = 1,447EUR 1 = XAF 655.957
	–	6,041	5,246	22,170	7,680
	–	54,888	1,121,256	357,116	9,242	EUR 1 = EGP 8.267947
	–	–	113,972	(3,899)	–	EUR 1 = TND 1.633976
	–	–	2,061,156	211,570	7,436	Difference = 1,142EUR 1 = MAD 11.199868
	–	–	144,193	93,576	72,244	EUR 1 = USD 1.3621Of which 2004 interim dividend of 72,244
	–	–	374,026	(1,651)	–
	–	–	61,780	1,124		EUR 1 = USD 1.3621
		54,777	8,401,315	2,675,670	4,375	EUR 1 = XPF 119.33174
	–	–	6,047	(9,301)	–
	–	–	209,869	88,362	2,647	Difference = 81EUR 1 = AED 5.00272
584,415		–	178,403	81,424	6,306
	–	–	98,314	34,105	3,685	EUR 1 = OMR 0.5105
5,478,258		75,046			81,099	Difference = 2,158
	16,792	67,989			1,432	Difference = 88
	743	0			289	Difference = 0
	0	707			397	Difference = 0

Unreimbursed Dividends

Report of the Statutory Auditors on the annual financial statements

Year ended December 31, 2004

This is a free translation into English of the Statutory Auditors' report issued in the French language and is provided solely for the convenience of English speaking readers. The Statutory Auditors' report includes information specifically required by French law in all audit reports, whether qualified or not, and this is presented below the opinion on the financial statements. This information includes explanatory paragraphs discussing the auditors' assessment of certain significant accounting and auditing matters. These assessments were considered for the purpose of issuing an audit opinion on the annual accounts taken as a whole and not to provide separate assurance on individual account captions or on information taken outside of the annual accounts. The report also includes information relating to the specific verification of information on the group management.

This report, together with the Statutory Auditors' report addressing financial and accounting information in the Chairman's report on internal control, should be read in conjunction with, and construed in accordance with French law and French professional auditing standards.

To the shareholders of Société Générale

In compliance with the assignment entrusted to us by the shareholders meeting, we hereby report to you, for the year ended December 31, 2004, on:

• the audit of the accompanying financial statements of Société Générale,

• the justification of our assessments,
• the specific procedures and disclosures prescribed by law.

These financial statements have been approved by the Board of Directors. Our responsibility is to express an opinion on these annual accounts based on our audit.

I. Opinion on the financial statements

We conducted our audit in accordance with French professional standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statements presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2004 and the results of its operations for the year then ended, in accordance with the accounting rules and principles applicable in France.

II. Justification of assessments

In accordance with the requirements of article L. 225-235 of the French Company Law (Code de commerce) relating to the justification of our assessments, we bring to your attention the following matters: • As detailed in Note 1 to the financial statements, your company records provisions to cover the credit risks inherent to its activities. We have reviewed the procedures implemented by the Management for identifying and assessing these risks and determining the amount of provisions considered as necessary.

• As detailed in Note 1 to the financial statements, your Company uses internal models to value financial instruments that are not listed on organised markets. As such, we have reviewed the control procedures related to the models dedicated to the determination of the parameters used and the inclusion of the risks associated to these instruments.

• In its current year end process, significant accounting estimates are performed by your Company related in particular to the value of the investments in subsidiaries, the recovery of deferred tax assets and the evaluation of pension and retirement liabilities. We have reviewed the underlying assumptions and verified that these accounting estimates are based on documented methods in accordance with the accounting principles described in Note 1.

We carried out the assessment of the reasonableness of these estimates.

Our assessment on these matters was made in the context of the performance of our audit of the annual financial statements taken as a whole and therefore contributed to the formation of the opinion expressed in the first part of this report.

III. Specific verifications and information

We have also performed the specific verifications required by law in accordance with professional standards applicable in France.

We have no matters to report regarding the fair presentation and the conformity with the financial statements of the information given in the Directors' Report and in the documents addressed to the shareholders with respect to the financial position and the financial statements.

In accordance with French law, we have ensured that the required information concerning the names and voting rights of the principal shareholders has been properly disclosed in the Board of Directors' Report.

Neuilly-sur-Seine and Courbevoie, March 10, 2005.

The Statutory Auditors

DELOITTE & ASSOCIES ERNST & YOUNG Audit

José-Luis Garcia Christian Mouillon

Information on common stock

Three-year breakdown of capital and voting rights(1)

		At December 31, 2004		At December 31, 2003		At December 31, 2002
	% of	% of voting	% of	% of voting	% of	% of voting
	capital	rights	capital	rights	capital	rights
Employees and former employeesvia the Group employee share
ownership plan	7.42%	13.57%	8.46%	14.21%	7.83%	13.11%
Groupama	2.97%	2.92%	3.02%	2.89%	3.08%	2.82%
Meiji Yasuda Life Insurance Cy	2.49%	4.73%	2.52%	4.68%	2.97%	5.28%
CDC (General Section)	1.87%	3.10%	1.97%	3.14%	1.88%	2.94%
Fondazione CRT	1.66%	1.63%	1.68%	1.61%	(2)	(2)
Dexia	1.44%	1.42%	1.31%	1.26%	1.40%	1.28%
Aviva	1.39%	1.37%	1.37%	1.33%	4.14%	4.51%
PSA	(2)	(2)	0.80%	1.38%	1.66%	3.00%
Pernod Ricard	(2)	(2)	(2)	(2)	0.69%	1.26%
Free float	71.92%	71.26%	72.01%	69.50%	70.80%	65.80%
Treasury stock	6,82%	0.00%	4.81%	0.00%	3.46%	0.00%
Buybacks	2.02%	0.00%	2.05%	0.00%	2.09%	0.00%
Total	100.00%	100.00%	100.00%	100.00%	100.00%	100.00%
Number of outstanding shares	445,153,159	452,307,138	438,434,749	457,086,131	430,170,265	469,480,478

To the best of Société Générale's knowledge, no other shareholders hold more than 1% of the capital or voting rights, excluding undertakings for collective investment in transferable securities (UCITS). (1) Including double voting rights (Article 14 of the Company's by-laws).

(2) Shareholders holding less than 1% of the capital or voting rights.

At June 30, 2004, on the basis of a study of identifiable bearer securities (TPI), the Société Générale Group had some 320,000 individual shareholders (representing 7.1% of the capital, excluding the employee share ownership plans).

No registered shareholder with 0.10% or more of the capital has pledged Société Générale shares as collateral.

Amount of common stock

At December 31, 2004, Société Générale's paid-up common stock amounted to EUR 556,441,448.75 and comprised 445,153,159 shares with a nominal value of EUR 1.25 per share, all eligible for dividends paid out of income earned from January 1, 2004.

If all vested stock options were to be exercised, 3,315,068 shares would be issued, representing a maximum potential dilution of 0.74%. The Group's common stock would then amount to EUR 560,585,283,75, divided into 448,468,227 shares.

As part of the Group's capital market activities, transactions may be carried out involving indexes or underlying assets with a Société Générale share component.

These transactions do not have an impact on the Group's future capital.

Changes in common stock

Description of operation	Dateof recordor completion	Changein numberof shares	Totalnumberof sharesafter operation	Commonstock	Changein commonstockresulting fromoperation (%)
			(nominal value: EUR 5)
Exercise of stock options (1st half 2000)up to May 10, 2000	May 10, 2000	33,590	104,364,211	521,821,055.00	0.03
			(nominal value: EUR 1.25)
Four-for-one stock split	May 17, 2000		417,456,844	521,821,055.00	0.03
Exercise of stock options(1st half until June 30, 2000)	Jul. 20, 2000	152,860	417,609,704	522,012,130.00	0.04
Increase through 2000 Company Savings Plan	Aug. 2, 2000	5,389,594	422,999,298	528,749,122.50	1.29
Exercise of stock options (2nd half 2000)	Jan. 16, 2001	249,120	423,248,418	529,060,522.50	0.06
Increase through contribution of assets by Sogénal	May 4, 2001	2,685,156	425,933,574	532,416,967.50	0.63
Increase through 2001 Company Savings Plan	May 16, 2001	4,747,048	430,680,622	538,350,777.50	1.11
Exercise of stock options (1st half 2001)	Jul. 16, 2001	286,060	430,966,682	538,708,352.50	0.07
Exercise of stock options (2nd half 2001)	Jan. 11, 2002	571,840	431,538,522	539,423,152.50	0.13
Cancellation of shares	Feb. 20, 2002	7,200,000	424,338,522	530,423,152.50	1.67
Exercise of stock options (1st half 2002)	Aug. 1, 2002	566,080	429,791,220	537,239,025.00	1.28
Increase through 2002 Company Savings Plan		4,886,618
Exercise of stock options (2nd half 2002)	Jan. 28, 2003	379,045	430,170,265	537,712,831.25	0.09
Exercise of stock options (1st half 2003)		152,130
Increase through 2003 Company Savings Plan	Jul. 16, 2003	7,346,674	437,669,069	547,086,336.25	1.71
Exercise of stock options (2nd half 2003)	Jan. 26, 2004	765,680	438,434,749	548,043,436.25	0.17
Exercise of stock options (1st half 2004)		836,443
Increase through 2003 Company Savings Plan	Jul. 16, 2004	5,222,573	444,493,765	555,617,206.25	1.38
Exercise of stock options (2nd half 2004)	Jan. 13, 2005	659,394	445,153,159	556,441,448.75	0.15
Cancellation of shares	Feb. 9, 2005	11,000,000	434,153,159	542,691,448.75	2.47

Under the authorization granted to it by the Extraordinary General Meeting of May 13, 1997, the Board of Directors, during its meetings of June 25, 1997, June 24, 1998, and January 12, 2001 granted stock subscription options to certain employees and officers of the Company. Moreover, following a recommendation by the Compensation Committee, the Board of Directors granted additional stock options on September 8, 1999, August 2, 2000 and January 16, 2002.

Under the authorization granted to it by the Extraordinary General Meeting of April 23, 2002, the Board of Directors granted stock purchase options during its meetings of April 22, 2003 and January 14, 2004.

At December 31, 2004, there were 3,315,068 subscription options outstanding, which could result in the issuance of 3,315,068 new shares representing additional nominal common stock of EUR 4.14 million (see "Stock Options" on page 36).

The Joint General Meeting of April 23, 2002 authorized the Board of Directors to carry out capital increases up to a maximum nominal amount of EUR 100 million for a period of five years, reserved for:

• Société Générale employees and former employees who are retired or on early retirement, and are members of the Company Savings Plan;

• employees and former employees of Société Générale and other affiliated companies or groups of companies under the regulations in force, who are retired or on early retirement and who are members of the Company of Group Savings Plan that provides the opportunity to participate in Société Générale capital increases reserved for employees, in accordance with the provisions of articles L. 225-129 and L. 225-138 of the French Commercial Code and L. 443-1 et seq. of the French Labor Code.

The purpose of this authorization is to enable qualifying employees to subscribe for new Société Générale shares, either directly or indirectly through one or more mutual funds, at a price defined in accordance with the provisions of article L. 443-5 of the French Labor Code.

A first operation was carried out under this authorization in 2003 for a nominal amount of EUR 9.2 million and a second operation was carried out in 2004 for a nominal amount of EUR 6.5 million.

Authorization to carry out stock market dealings in own shares

The Joint General Meeting of April 29, 2004 authorized the Company to buy or sell its own shares on the stock market with a view to canceling bought-back shares, enabling the introduction of an employee incentive scheme or transactions reserved for employees, allowing acquisitions of all types, managing shareholders' equity and regulating the Company share price, under the conditions and limits set by article L. 225-209 et seq. of the French Commercial Code, and within the following limits:

• maximum purchase price: EUR 103;
• minimum selling price: EUR 41;

• maximum number of shares that may be purchased: 10% of total common stock.

Duration of authorization

Eighteen months. The next Shareholders' Meeting will be asked to renew this authorization under the terms defined in the eighth resolution (see page 278).

Identification of holders of bearer shares (article 6 of the by-laws)

The Company may, at any time, in accordance with current laws and regulations, request that the organization in charge of clearing transactions in its shares provide information regarding those shares and other securities that confer on their owners an immediate or deferred voting right at shareholders' meetings and the holders of such shares and securities.

Information on the portion of capital held by employees under the Company and Group Savings Plans

In accordance with article L. 225-102 of the French Commercial Code, it is hereby declared that at December 31, 2004, employees of Société Générale and Crédit du Nord and its subsidiaries held a total of 33,024,897 of Société Générale's shares, representing 7.5% of common stock, through the mutual fund created under the Société Générale Company and Group Savings Plans.

Shareholder agreements

On July 24, 2000, Société Générale signed an agreement with Santander Central Hispano concerning the management of the two parties' cross-holdings. Under the terms of this agreement, Société Générale and Santander Central Hispano each grant the other party a pre-emptive right to the shares held directly or via a subsidiary by each of the parties in the capital of the other, with this right not applying in the event of a public offer made by a third party for the shares of one or other of the parties.

The agreement was initially concluded for a period of three years from the date of signing and is subsequently renewable for two-year periods.

This pre-emptive clause was published by the French Financial Markets Council in Decision No. 201C1417 dated November 30, 2001. This agreement was still in place at December 31, 2004. However, at this date, Santander Central Hispano no longer held any shares in Société Générale.

List of authorizations to carry out capital increases outstanding in 2004 and their use

article L. 225-100 of the French Commercial Code specifies that the annual report must contain: "a table listing all outstanding authorizations granted by the General Meeting of Shareholders to the Board of Directors or Management Board to carry out capital increases under Articles L. 225-129-1 and L. 225-129-2. The table must also indicate the use made of these authorizations over the financial year."

Type ofcapital increase	Purpose ofthe authorization	Period ofvalidity	Nominallimit	Useover 2004
Capital increasegoverned bycommon law	Authorization to increase capitalstock up to an overall limit throughthe issue of securities with animmediate or deferred equitycomponent.	Granted by the General Meetingof April 23, 2002under its 12th resolution.For a period of: 26 monthsEarly expiry: April 28, 2004	EUR 600 millionEUR 4 billion for debt securitieswith an equity component	None
	Authorization to increase capitalstock up to an overall limit throughthe issue of securities with animmediate or deferred equitycomponent.	Granted by the General Meetingof April 29, 2004under its 12th resolution.For a period of: 26 monthsExpiry: June 29, 2006	EUR 900 millionEUR 6 billion for debt securitieswith an equity component	None
	Authorization to increase capitalstock up to an overall limit throughthe issue of securities withoutpreemptive subscription rights andwith an immediate or deferredequity component.	Granted by the General Meetingof April 23, 2002under its 13th resolution.For a period of: 26 monthsEarly expiry: April 28, 2004	EUR 600 millionEUR 4 billion for debt securitieswith an equity componentNote: These limits are added tothe overall limit set under the12th resolution of the GeneralMeeting of April 23, 2002.	None
	Authorization to increase capitalstock up to an overall limit throughthe issue of securities withoutpreemptive subscription rights andwith an immediate or deferredequity component.	Granted by the General Meetingof April 23, 2002 underits 13th resolution.For a period of: 26 monthsExpiry: June 29, 2006	EUR 300 millionEUR 6 billion for debt securitieswith an equity componentNote: These limits are added tothe overall limit set under the12th resolution of the GeneralMeeting of April 29, 2004.	None
	Authorization to increase capitalstock through the incorporation ofreserves, retained earnings or additional paid-in capital.	Granted by the General Meetingof April 23, 2002under its 12th resolution.For a period of: 26 monthsEarly expiry: April 28, 2004	EUR 1.2 billion	None
	Authorization to increase capitalstock through the incorporation ofreserves, retained earnings or additional paid-in capital.	Granted by the General Meetingof April 29, 2004under its 12th resolution.For a period of: 26 monthsExpiry: June 29, 2006	EUR 1.2 billion	None

Type ofcapital increase	Purpose ofthe authorization	Period ofvalidity	Nominallimit	Useover 2004
Capital increasereserved foremployees	Authorization to increase capitalstock through the issue of securities with an equity component,reserved for employees subscribingto a Société Générale Company orGroup savings plan.	Granted by the General Meetingof April 23, 2002under its 15th resolution.For a period of: 5 yearsEarly expiry: April 28, 2004, exceptfor the 2004 capital increase whichwas decided by the Board of Directors of February 11, 2004.	EUR 100 million	EUR 6,528,216.25
	Authorization to increase capitalstock through the issue of securities with an equity component,reserved for employees subscribingto a Société Générale Company orGroup savings plan.	Granted by the General Meetingof April 29, 2004under its 15th resolution.For a period of: 26 monthsExpiry: June 29, 2006	EUR 25 million	None
Capital increasefor the allocationof stock options	Authorization to increase capitalstock through the allocation ofoptions to subscribe for new sharesto employees and senior officers.	Granted by the General Meetingof April 23, 2002under its 16th resolution.For a period of: 26 monthsEarly expiry: June 22, 2004	10% of capital (including sharepurchase options)	None(allocation of sharepurchase options)
	Authorization to increase capitalstock through the allocation ofoptions to subscribe for new sharesto employees and senior officers.	Granted by the General Meetingof April 29, 2004under its 16th resolution.For a period of: 26 monthsExpiry: June 28, 2006	5% of capital (including sharepurchase options)	None

Capital increase reserved for employees

Supplementary report of the Board of Directors (Article 155-2 of the decree of March 23, 1967)

I - Decision to carry out a capital increase reserved for employees

Under the authorization granted by the Joint General Meeting of April 23, 2002, the Board of Directors decided the following at its meeting of February 11, 2004:

• to carry out a further capital increase through the issue of shares to be subscribed for in cash, and reserved for employees and former employees of Société Générale, Crédit du Nord and subsidiaries of Crédit du Nord who are eligible for the Société Générale Group Savings Plan and the International Group Savings Plan;

• that the subscribed shares, which will be eligible for dividends as of January 1, 2004, shall be fully paid up at the time of subscription;

• that the opening date of the subscription period and the subscription price shall be decided at a later date.

The transaction notice was registered with the Autorité des marchés financiers (French Securities Regulator) under number 04-313 on April 22, 2004.

The Board of Directors set the subscription period (from Monday, May 10, 2004 to Wednesday, May 26, 2004 inclusive) and the subscription price on April 29, 2004.

II - Amount of the increase

The Board of Directors of February 11, 2004 set the maximum amount of the increase at EUR 15 million in nominal value (12 million shares with a nominal value of EUR 1.25). Capital stock shall only be increased up to the amount effectively subscribed for.

The Board decided that this increase will be carried out in four tranches:

First tranche

The maximum nominal amount of the first tranche is set at EUR 8.75 million, representing 7,000,000 new shares reserved for members of the Société Générale Group Savings Plan subscribing through the company mutual funds.

Second tranche

The maximum nominal amount of the second tranche is set at EUR 1.25 million, representing 1,000,000 new shares reserved for members of the Company Savings Plans of Crédit du Nord and its subsidiaries, subscribing through a company mutual fund.

Third tranche

The maximum nominal amount of the third tranche is set at EUR 1.25 million, representing 1,000,000 new shares reserved for members of the Group Savings Plan for Société Générale Group companies having their Head Office either in mainland France or in the French overseas departments, subscribing through a company mutual fund.

Fourth tranche

The maximum nominal amount of the fourth tranche is set at EUR 3.75 million, representing 3,000,000 new shares reserved for direct subscribers to the International Group Savings Plan who are employees of (i) Société Générale Group companies having their Head Office outside mainland France or in the French overseas territories, or (ii) branches of the Société Générale Group located outside France or in the French overseas territories.

III - Subscription price

Within the limits set by article L. 443-5 of the French Labor Code and by the decisions of the Joint General Meeting of April 23, 2002, the Board of Directors of February 11, 2004 decided that:

■ the reference price for the subscription of Société Générale shares may not exceed the average opening price quoted on the Premier Marché of Euronext Paris SA over the twenty (20) trading days preceding the date of the Board of Directors' decision setting the opening date of the subscription period,

■ the subscription price shall be equal to the reference price less any applicable discount, as specified below:

• for the first and third tranches described in paragraph II above:
• for individual investments of up to EUR 20,000, a discount of 20% shall be applied to the reference price;
• for individual investments of between EUR 20,001 and EUR 40,000, no discount shall be applied;
• for the second and fourth tranches described in paragraph II above, a discount of 20% shall be applied to the reference price.

■ in the case of beneficiaries of the International Group Savings Plan, the method used to calculate the reference price for Société Générale shares and the discount may be modified in exceptional cases by the Chairman of the Board of Directors, to comply with local laws and/or regulations, but in all cases the provisions of French law shall be respected.

As a result, on the basis of the average opening price quoted for Société Générale shares on the Premier Marché of Euronext Paris SA over the twenty (20) trading days prior to its decision, that is EUR 72.44 (hereafter referred to as the reference price), the Board of Directors of April 29, 2004 set the following subscription prices:

• for the first and third tranches

(i) for individual investments of up to EUR 20,000, the subscription price was set at EUR 57.96, equivalent to the reference price less the 20% discount,

(ii) for individual investments of between EUR 20,001 and EUR 40,000, the subscription price was set at EUR 72.44, equivalent to the reference price.

• for the second tranche, the subscription price was set at EUR 57.96, equivalent to the reference price less the 20% discount.

• for the fourth tranche, the subscription price was set at EUR 57.96, equivalent to the reference price less the 20% discount, except for employees who are residents of the State of California, for whom the subscription price was set at EUR 61.58, equivalent to the reference price less a 15% discount.

IV - Impact of the capital increase

Theoretical impact on net assets per share

Based on the financial statements at December 31, 2003, after appropriation of net income for the year, net assets per Société Générale share amounted to EUR 32.21.

If this issue were fully subscribed for the maximum nominal amount of EUR 15 million (or 12,000,000 new shares), at the discounted price of EUR 57.96 per share, a total of EUR 695.52 million would be raised. Net assets per share would then be EUR 32.90.

Theoretical impact on the market price

This effect depends on the evolution of the share price in relation to its current level, and on the success of the issue.

If the maximum limit were reached and if the market price remained unchanged from the average opening price over the twenty trading days preceding April 29, 2004, and if all new shares were issued at the discounted price of EUR 57.96 per share, market capitalization would be increased to EUR 32,455.73 million, for a total number of shares of 450,434,749. The theoretical impact of the increase would therefore be a fall of 0.53%, with the theoretical market price of the share being equal to 99.47% of its pre-issuance level.

It should be noted that the above measure of the potential dilutive effect of the issue is theoretical, and will be altered by the profitability of the funds received.

Supplementary report of the Statutory Auditors on the capital increase reserved for employees

(Free translation of the French original)

To the Shareholders of Société Générale,

In our capacity as Statutory Auditors of your Company, and in compliance with Article 155-2 of the Decree of March 23, 1967 and further to our special report dated March 6, 2002, we hereby report on the issue of reserved shares approved by the Shareholders' Meeting of April 23, 2002.

May we remind you that in accordance with article L. 225-129-6 of the French Company Law (Code de commerce), this increase in capital is reserved for the employees of Société Générale and affiliated companies under the current company savings plan or to be implemented.

The Shareholders empowered your Board of Directors to proceed with, and determine the final conditions.

Exercising this empowerment, on February 11, 2004, your Board of Directors voted to proceed with a maximum increase in capital of EUR 15 million, through the issue of shares to be subscribed in cash in four tranches:

• the first tranche, for an amount of EUR 8.75 million, is reserved for Société Générale employees and former retired or on early retirement employees who are members of the company Savings Plan and who will subscribe through a company mutual fund;

• the second tranche, for an amount of EUR 1.25 million, is reserved for employees and former retired or on early retirement employees of Crédit du Nord and its subsidiaries and who will subscribe through a company mutual fund;

• the third tranche, for an amount of EUR 1.25 million, is reserved for employees of Société Générale subsidiaries having their Head Office either in mainland France or in French Overseas Department and who will subscribe through a company mutual fund;

• the fourth tranche, for an amount of EUR 3.75 million, is reserved for employees of the Société Générale Group subsidiaries having their Head Office outside France or French Overseas Departments, and employees of branches of the Société Générale Group located either outside France or French Overseas Territories and who will subscribe directly to the reserved operation.

Your Board of Directors determined the issue price and the subscription period on April, 29 2004.

We conducted our work in accordance with French professional standards. These standards require that we perform the necessary procedures to verify:

• the financial information taken from the annual accounts, prepared by the Board of Directors. We performed an audit of these annual accounts in accordance with French professional standards;

• The compliance with the terms of the operation as authorized by the shareholders' meeting and the fairness of the information provided in the Board of Director's supplementary report on the choice of constituent elements used for calculating the issue price and on its amount.

We have nothing to report on:

• the fairness of the financial information taken from the Company's accounts and included in the Board of Directors' supplementary report,

• the compliance with the terms of the operation as authorized by the Shareholders' meeting on April 23, 2002 and the information provided,

• the proposed cancellation of the preferential subscription rights, upon which you have voted, the choice of constituent elements used for calculating the issue price and its final amount,

• the presentation of the effect of the issuance on the shareholder's financial situation as expressed in relation to shareholders' equity and on the market value of the shares.

Neuilly-sur-Seine and Courbevoie, May 6, 2004.

The Statutory Auditors

DELOITTE TOUCHE TOHMATSU ERNST & YOUNG Audit

José-Luis Garcia Christian Mouillon

Major changes in the investment portfolio in 2004

In 2004, the following transactions affected Société Générale's investment portfolio:

Oustide France

Creation of SG Vestia Systems Inc. – Lyxor SGR Spa.

Acquisition of interest in General Bank of Greece – Secfinex Ltd.

Increase of interest in Banco Société Générale Argentina – SG Algérie – Société Générale de Banques en Côte d'Ivoire following the takeover of Sogéfinance – BRD.

Subscription to capital increase: Banco SG Brazil SA – United Arab Bank* – SG Algérie – Bank Muscat* – Union Internationale de Banques – SG Yugoslav Bank AD.

Disposal of total interest in Bank SG Indonesia – Sogéfinance following the takeover by Société Générale of Banques en Côted'Ivoire – SG Finance NV Curaçao – Coredeal MTS Ltd – Intersoge – Meteo Transformer Ltd – SG Property Ltd – Oversight Partners I. LLC – LTCM Capital – Dongfeng Citroën Automobiles – SG Hungaria Bank.

Reduction of interest in SG Asia Singapore – Hôtel du Bois Rouge Corp.

In France

Creation of SAS STET.

Acquisition of interest in SNC Sirius.

Acquisition of ALD International SA.

Increase of interest in Fimat International Banque – Boursorama – CRH (Crédit de Refinancement de l'Habitat) – SG FGAS – Sofaris – SG Asset Management.

Subscription to capital increase: Crédit Logement – Sogessur – Ipersoc SAS – BMS Exploitation – Genefitec which has been renamed SG Financial Services Holding – SIFA (Société d'Investissement France Active).

Disposal of total interest in Sophia – Bains de Mer et du Cercle des Étrangers in Monaco – SCI Palmetta – Patriges Gracechurch – SCI La Fauconnière – SCI de la Roue – Banque Franco Roumaine – SCI Soge Évry – Scope-Oct – SCI Victoria – Vertical Trade.

Reduction of interest in SI 29 bd Haussmann.

In accordance with article L. 233-6 of the French Commercial Code, the following table summarizes the significant changes in Société Générale's investment portfolio in 2004.

Increase

Increase				Decrease
Declaration	Company		% of capital	Declaration	Company		% of capital
threshold		Dec. 31, 2004	Previously	threshold		Dec. 31, 2004	Previously
5%				5%	SCI Palmetta	–	10.00%
					Vertical Trade	–	8.00%
					Banque Franco Roumaine	–	6.15%
10%	SAS STET	16.67%	–	10%	SCI Soge Evry	–	20.00%
	SG FGAS	11.63%	9.09%		Sogéfinance		18.00%
					SCI Victoria	–	15.00%
20%				20%
33%	Secfinex Ltd	37.50%	–	33%	Meteo Transformer Ltd	–	50.00%
50%	Ipersoc SAS	100.00%	–
	SNC Sirius	100.00%	–
	ALD International SA	100.00%	–	50%	SG Hungaria Bank	–	100.00%
	Lyxor SGR Spa	100.00%	–		Intersoge	–	100.00%
	SG Vestia Systems Inc.	65.00%	–		SG Finance NV Curaçao	–	100.00%
	General Bank of Greece	50.01%	–		Patriges Gracechurch	–	100.00%
					Bank SG Indonesia	–	100.00%
					SG Property Ltd	–	100.00%

Activities of principal subsidiaries and affiliates

Company accounts of subsidiaries prepared in accordance with local accounting standards before consolidation restatements

Amounts in millions of euros at December 31	Activities	Year	%	Total
Company name and location		end	interest	assets
RETAIL BANKING NETWORKS and affiliates
France
Crédit du Nord Group	French Networks	Dec. 31, 2003	80.0%	26,869.9
France		Dec. 31, 2004	80.0%	28,478.8
Banque de Polynésie (BDP)	Retail Banking outside France	Dec. 31, 2003	80.0%	937.8
French Polynesia		Dec. 31, 2004	80.0%	954.5
Société Générale Calédonienne de Banque (SGCB)	Retail Banking outside France	Dec. 31, 2003	100.0%	775.0
New Caledonia		Dec. 31, 2004	100.0%	846.0
Banque Française Commerciale "Océan Indien" (BFCOI)	Retail Banking outside France	Dec. 31, 2003	50.0%	749.0
Reunion		Dec. 31, 2004	50.0%	794.0
Société Générale de Banque aux Antilles (SGBA)	Retail Banking outside France	Dec. 31, 2003	100.0%	295.3
French West Indies		Dec. 31, 2004	100.0%	289.7
Central and Eastern Europe
Komercni Banka Group (KB)	Retail Banking outside France	Dec. 31, 2003	60.4%	13,811.6
Czech Republic		Dec. 31, 2004	60.4%	14,715.2
Banque Roumaine de Développement (BRD)	Retail Banking outside France	Dec. 31, 2003	51.0%	1,974.5
Romania		Dec. 31, 2004	58.3%	2,935.3
General Bank of Greece (GBG)*	Retail Banking outside France	Dec. 31, 2003	0.0%	3,436.0
Greece		Dec. 31, 2004	50.0%	3,893.0
SKB Banka	Retail Banking outside France	Dec. 31, 2003	99.6%	1,654.8
Slovenia		Dec. 31, 2004	99.6%	1,615.6
SG Express Bank	Retail Banking outside France	Dec. 31, 2003	98.0%	340.0
Bulgaria		Dec. 31, 2004	98.0%	392.7
Middle East and Africa
Société Générale Marocaine de Banques (SGMB)	Retail Banking outside France	Dec. 31, 2003	52.0%	2,439.0
Morocco		Dec. 31, 2004	52.0%	2,488.0
Société Générale de Banques au Liban (SGBL)	Retail Banking outside France	Dec. 31, 2003	50.0%	1,976.8
Lebanon		Dec. 31, 2004	50.0%	1,845.3
National Société Générale Bank (NSGB) – SAE Le Caire	Retail Banking outside France	Dec. 31, 2003	54.3%	1,549.0
Egypt		Dec. 31, 2004	54.3%	1,509.0
Union Internationale de Banques (UIB)	Retail Banking outside France	Dec. 31, 2003	52.0%	1,085.1
Tunisia		Dec. 31, 2004	52.0%	986.6
Société Générale de Banques en Côte-d'Ivoire (SGBCI)	Retail Banking outside France	Dec. 31, 2003	56.6%	653.1
Côte d'Ivoire		Dec. 31, 2004	68.2%	633.6
Société Générale de Banques au Sénégal (SGBS)	Retail Banking outside France	Dec. 31, 2003	57.7%	524.8
Senegal		Dec. 31, 2004	57.7%	574.0
Société Générale de Banques au Cameroun (SGBC)	Retail Banking outside France	Dec. 31, 2003	58.1%	460.2
Cameroon		Dec. 31, 2004	58.1%	571.0
SSB Bank Ltd	Retail Banking outside France	Dec. 31, 2003	51.0%	188.1
Ghana		Dec. 31, 2004	51.0%	203.3
Americas
Banco SG SA	Retail Banking outside France	Dec. 31, 2003	99.5%	312.0
Argentina		Dec. 31, 2004	99.5%	369.0

* Company acquired in 2004.

Shareholders'equity (1)	Customerdeposits	Customerloans	technicalreserves (2)	Sales (3)	Net bankingincome	Net income	Employees
1,274.4	14,292.6	17,291.8	–	–	1,234.4	190.4	7,904
1,366.6	14,990.7	18,216.2	–	–	1,308.8	233.2	7,759
59.7	787.5	754.2	–	–	57.5	11.5	290
61.6	728.7	756.4	–	–	57.6	13.2	307
77.0	614.0	599.0	–	–	50.0	18.0	284
87.0	652.0	659.0	–	–	55.0	25.0	273
51.8	577.0	512.6	–	–	47.9	6.4	406
55.3	571.2	616.5	–	–	45.4	5.4	372
11.3	152.1	217.8	–	–	15.1	(1.7)	141
10.4	154.4	232.1	–	–	14.2	(6.4)	143
1,246.7	10,785.5	4,043.9	–	–	674.1	285.8	8,258
1,434.7	11,882.4	5,049.0	–	–	745.7	305.3	7,309
289.7	1,508.7	1,188.9	–	–	195.4	57.3	4,265
366.8	2,153.8	1,658.5	–	–	271.5	90.8	4,433
221.0	2,641.0	2,332.2	–	–	190.0	7.3	2,294
152.1	2,815.0	2,199.0	–	–	143.0	(161.4)	2,277
120.9	1,114.3	800.2	–	–	78.7	0.4	1,024
121.1	1,043.9	904.6	–	–	75.1	0.7	972
49.6	266.9	211.7	–	–	28.1	9.6	848
56.2	306.3	271.5	–	–	33.2	11.6	914
237.0	1,661.0	1,416.0	–	–	152.0	35.0	2,062
233.0	1,843.0	1,418.0	–	–	154.0	19.0	2,097
35.0	1,605.1	645.3	–	–	59.3	2.0	1,010
33.1	1,458.2	593.9	–	–	62.2	1.0	1,010
129.0	1,331.0	827.0	–	–	81.0	30.0	886
130.0	1,297.0	818.0	–	–	86.0	32.0	1,009
86.898.6	802.4790.7	796.5776.7	–	–	37.539.7	1.2(2.5)	1,4591,435
93.1	479.2	392.7	–	–	62.0	5.9	767
102.3	457.7	391.7	–	–	56.0	15.2	746
47.3	398.9	364.0	–	–	41.4	11.1	604
51.1	413.4	391.0	–	–	46.5	10.6	610
46.6	389.2	273.1	–	–	34.4	10.7	545
51.9	407.1	274.5	–	–	37.8	11.5	556
32.8	113.8	67.2			32.1	7.1	689
36.0	131.7	73.4	–	–	34.0	8.8	707
38.0	223.0	137.0	–	–	15.0	(22.0)	957
34.0	281.0	151.0	–	–	23.0	(10.0)	963

Mathematical/

GROUPE SOCIÉTÉ GÉNÉRALE - 2004 ANNUAL REPORT

Activities of principal subsidiaries and affiliates

Company accounts of subsidiaries prepared in accordance with local accounting standards before consolidation restatements

Amounts in millions of euros at December 31	Activities	Year	%	Total
Company name and location		end	interest	assets
Affiliates
Sogébail	Real estate lease finance	Dec. 31, 2003	44.3%	1,575.0
France		Dec. 31, 2004	45.3%	1,437.7
Sogéfimur	Real estate lease finance	Dec. 31, 2003	100.0%	988.7
France		Dec. 31, 2004	100.0%	1,010.3
Sogelease France	Equipment lease finance	Dec. 31, 2003	100.0%	1,752.8
France		Dec. 31, 2004	100.0%	1,895.9
Compagnie Générale d'Affacturage (CGA)	Factoring	Dec. 31, 2003	100.0%	1,859.4
France		Dec. 31, 2004	100.0%	1,836.6
FINANCIAL SERVICES
GEFA GmbH	Equipment finance	Dec. 31, 2003	100.0%	5,005.7
Germany		Dec. 31, 2004	100.0%	5,009.9
GEFA Leasing GmbH	Equipment finance	Dec. 31, 2003	100.0%	1,682.4
Germany		Dec. 31, 2004	100.0%	1,712.0
Franfinance Group	Specialized finance	Dec. 31, 2003	100.0%	4,540.5
France		Dec. 31, 2004	100.0%	4,577.0
Fiditalia Spa	Consumer credit	Dec. 31, 2003	100.0%	3,011.1
Italy		Dec. 31, 2004	100.0%	3,610.8
ALD Autoleasing GmbH	Vehicle leasing and finance	Dec. 31, 2003	100.0%	1,551.0
Germany		Dec. 31, 2004	100.0%	1,823.6
Compagnie Générale de Location d'Équipements	Vehicle finance	Dec. 31, 2003	99.7%	2,555.0
(CGL-CGI) – France		Dec. 31, 2004	99.7%	2,758.6
Eqdom	Consumer credit	Dec. 31, 2003	53.6%	440.5
Morocco		Dec. 31, 2004	53.6%	430.3
Sogécap	Life insurance	Dec. 31, 2003	100.0%	41,034.1
France		Dec. 31, 2004	100.0%	46,735.5
Sogessur	Property insurance	Dec. 31, 2003	65.0%	98.3
France		Dec. 31, 2004	65.0%	122.0
Europe Computer Systèmes (ECS Group)	IT asset leasing and management	Dec. 31, 2003	100.0%	655.1
France		Dec. 31, 2004	100.0%	676.6
CORPORATE AND INVESTMENT BANKING
Société Générale Canada	Corporate and investment banking	Dec. 31, 2003	100.0%	4,048.6
Canada		Dec. 31, 2004	100.0%	4,129.1
Banco Société Générale Brasil SA	Corporate and investment banking	Dec. 31, 2003	100.0%	103.6
Brazil		Dec. 31, 2004	100.0%	154.4
Korean French Banking Corporation-Sogéko	Corporate and investment banking	Dec. 31, 2003	41.4%	164.7
South Korea		Dec. 31, 2004	41.4%	167.4
Genefim	Real estate lease finance	Dec. 31, 2003	100.0%	1,184.8
France		Dec. 31, 2004	100.0%	1,225.4
Cowen & Company	Corporate banking	Dec. 31, 2003	100.0%	17,354.5
United States		Dec. 31, 2004	100.0%	572.0
SG Americas Securities*	Corporate banking	Dec. 31, 2003	0.0%	–
United States		Dec. 31, 2004	100.0%	21,061.2

* Company created in 2004.

Shareholders'equity (1)	Customerdeposits	Customerloans	technicalreserves (2)	Sales (3)	Net bankingincome	Net income	Employees
201.7195.4	––	1,404.71,305.0	––	––	25.722.4	12.811.5	––
67.1	–	855.9	–	–	10.0	4.0	–
66.3	–	911.2	–	–	10.5	4.1	–
251.4	–	1,519.4	–	–	17.3	3.7	–
269.2	–	1,676.6	–	–	31.7	17.8	–
26.7	–	1,806.1	–	67.8	41.7	8.1	187
36.9	–	1,790.6	–	72.5	46.9	10.2	186
498.1	34.6	4,934.9	–	–	223.3	100.9	740
531.7	167.6	4,791.7	–	–	208.2	134.5	736
51.1	58.9	1,542.3	–		14.4	–	–
51.1	46.4	1,611.7	–		52.1	–	–
320.9336.2	––	4,411.94,419.1	––	––	242.1241.1	59.461.0	1,2341,299
195.9	–	2,627.9	–	–	167.2	15.8	640
225.4	–	3,213.0	–	–	195.9	29.5	673
171.3	989.0	682.0	–	391.2	94.1	10.7	601
179.8	15.1	595.3	–	170.7	97.0	10.8	615
156.0	39.0	1,606.0	–	–	129.0	27.0	533
191.9	35.0	1,710.0	–	–	144.0	33.2	552
89.692.9	––	479.5491.5	––	––	43.045.0	10.811.8	199310
935.41,020.3	––	––	37,292.042,178.2	5,667.26,607.9	226.6232.8	102.9100.7	377398
10.0	–	–	34.2	52.6	10.6	(9.8)	210
12.3	–	–	72.6	87.3	12.6	(8.4)	226
105.8	–	–	–	1,826.8	150.4	27.5	972
110.2			–	1,729.4	156.3	19.7	1,082
178.7196.5	1,052.11,647.3	2,651.42,309.2	––	––	40.743.6	5.417.8	122112
20.6	38.4	4.2	–	–	5.2	(9.0)	76
30.9	27.9	42.2	–	–	4.4	(1.9)	75
22.2	37.2	98.5	–	–	3.9	(3.6)	73
52.9	20.0	86.9	–	–	7.7	21.3	59
153.1	–	1,117.0	–	–	29.0	14.9	42
165.0	–	1,159.1	–	–	38.9	23.7	41
411.7215.7	29.8–	35.9–	––	––	470.2293.1	(174.8)17.8	637514
–	–	–	–	–	–	–	–
293.1	14.8	17.7	–	–	175.2	57.7	339

Mathematical/

Activities of principal subsidiaries and affiliates

Company accounts of subsidiaries prepared in accordance with local accounting standards before consolidation restatements

Activities	Yearend	%interest	Totalassets
Corporate banking	Dec. 31, 2003Dec. 31, 2004	100.0%100.0%	243.7220.1
Securities brokerage	Dec. 31, 2003Dec. 31, 2004	100.0%100.0%	101.2103.9
Securities brokerage	Dec. 31, 2003Dec. 31, 2004	100.0%100.0%	1,856.14,793.0
Securities brokerage	Dec. 31, 2003Dec. 31, 2004	100.0%100.0%	341.4277.5
Asset management	Dec. 31, 2003Dec. 31, 2004	100.0%100.0%	1,973.51,701.3
Bank specializingin alternative investment	Dec. 31, 2003Dec. 31, 2004	100.0%100.0%	4,985.92,563.7
Asset management	Dec. 31, 2003Dec. 31, 2004	60.9%66.5%	321.7401.3
Private banking	Dec. 31, 2003Dec. 31, 2004	100.0%100.0%	16,737.820,739.1
Private banking	Dec. 31, 2003Dec. 31, 2004	100.0%100.0%	3,357.93,735.7
Private banking	Dec. 31, 2003Dec. 31, 2004	95.5%95.5%	389.0515.3
Derivatives brokerage	Dec. 31, 2003Dec. 31, 2004	100.0%100.0%	12,723.012,876.0
Securities clearing	Dec. 31, 2003Dec. 31, 2004	100.0%100.0%	932.8522.7
Online brokerage	Dec. 31, 2003Dec. 31, 2004	71.1%71.7%	791.5767.7

(1) Shareholders' equity including results for the year.

(2) For insurance companies.

(3) For stockbrokers, insurance and service companies to which this notion applies.

Subsidiaries for which no staff numbers are given do not have any dedicated employees

■ General Bank of Greece (Greece)

This company was acquired by Société Générale in March 2004 (data for 2003 is indicative).

The exceptional loss booked in 2004 essentially reflects additional provisions for loan and employee commitments. The lack of adequate provisioning noted during the acquisition was anticipated in the opening balance sheet of General Bank of Greece, integrated into the Société Générale Group's accounts.

■ Gefa Leasing

Given the existence of an agreement for the transfer of Gefa Leasing's results to Gefa GmbH, the data given above for Gefa Leasing are not representative of its actual business (a portion of its net banking income and net income is transferred directly to Gefa GmbH).

Shareholders'	Customer	Customer	Mathematical/technical		Net banking
equity (1)	deposits	loans	reserves (2)	Sales (3)	income	Net income	Employees
76.4	–	16.5	–	–	25.6	7.7	64
80.5	–	18.1	–	–	31.8	9.8	71
22.4	–	–	–	63.7	37.4	3.9	118
20.7	–	–	–	72.1	47.3	2.8	119
146.5	5.3	784.0	–	–	170.7	30.8	244
161.0	1.2	3,145.5	–	–	134.6	19.0	227
138.7	–	–	–	94.8	97.2	54.6	95
158.3	–	–	–	121.5	126.0	124.6	123
1,690.1	–	–	–	499.2	–	146.6	736
1,679.9	–	–	–	485.6	–	133.4	727
49.3	1,421.2	848.7	–	–	29.1	9.9	83
43.1	811.4	1,107.2	–	–	9.4	3.7	64
184.1	–	–	–	280.6	–	21.1	587
231.2	–	–	–	385.8	–	43.9	583
1,147.8	6,169.6	6,301.1	–	–	370.6	166.8	909
1,749.6	7,232.2	7,182.1	–	–	339.0	145.9	922
431.8	2,794.8	463.3	–		77.3	(4.1)	434
451.5	3,164.2	571.5	–		78.5	20.1	441
38.1	311.8	11.3	–	–	28.5	5.9	174
44.9	441.2	35.0	–	–	37.0	9.3	187
205.5	9,581.0	191.3	–	–	402.0	64.3	1,175
205.4	11,643.0	254.1	–	–	411.6	43.1	1,249
21.5			–	14.8	15.8	2.6	56
21.6			–	14.7	15.6	2.7	53
101.7	384.7	18.9	–	88.9	66.9	(6.8)	378
102.6	426.6	27.0	–	101.0	78.0	10.5	352

■ SG Americas Securities

This company was set up in 2004 to assume the derivatives activities of SG Cowen in the United States.

■ Société Générale Bank & Trust

SG Private Banking (Suisse) SA, created following the merger in November 2003 of Compagnie Bancaire de Genève and SG Ruegg Bank, is now sub-consolidated under SGBT Luxembourg.

2004 CONSOLIDATED FINANCIAL STATEMENTS UNDER IFRS 240_241

2004 Consolidated Financial Statements under IFRS

SOCIÉTÉ GÉNÉRALE GROUP - 2004 ANNUAL REPORT

Consolidated IFRS balance sheet at December 31, 2004, and consolidated opening balance at January 1, 2004 (not incl. IAS 32/39 and IFRS 4)

In millions of euros	31.12.2004	01.01.2004
ASSETS
Cash, due from central banks	5,206	6,755
Securities portfolio	217,285	193,357
Due from banks	66,117	60,283
Customers loans	208,184	191,929
Lease financing and similar agreements	20,589	17,812
Tax assets	1,374	1,514
Other assets	70,809	56,800
Investments in subsidiaries and affiliates accounted for by the equity method	348	562
Tangible and intangible fixed assets	9,110	8,445
Goodwill	2,333	2,187
Total	601,355	539,644
LIABILITIES
Due to central banks	1,505	2,827
Due to banks	92,380	83,620
Customer deposits	213,433	196,090
Securitized debt payables	97,730	82,917
Tax liabilities	2,411	2,499
Other liabilities	109,563	96,295
Underwriting reserves of insurance companies	46,833	41,144
Provisions for general risks and commitments	2,854	2,509
Subordinated debt	11,930	10,945
Preferred shares	2,049	2,120
Total liabilities	580,688	520,966
Shareholders' equity
Shareholders' equity, Group share
• Common stock	556	548
• Equity instruments and associated reserves	2,672	3,061
• Retained earnings	12,055	13,134
• Net income	3,293
• Sub-total equity, Group share	18,576	16,743
Minority interests	2,091	1,935
Total equity	20,667	18,678
Total	601,355	539,644

Consolidated IFRS income statement (not incl. IAS 32/39 and IFRS 4)

In millions of euros	2004
Net interest income	6,147 (1)
Dividend income	396
Dividends paid on preferred shares	(144)
Commissions (revenue)	7,106
Commissions (expense)	(1,831)
Net income from financial transactions	4,222
Net income from other activities	510 (2)
Net banking income	16,406
Personnel expenses	(6,743)
Other operating expenses	(3,651)
Amortization and depreciation expenses for intangible and tangible fixed assets	(668)
Gross operating income	5,344
Cost of risk	(568)
Operating income	4,776
Net income from companies accounted for by the equity method	40
Net income from other assets	195
Impairment losses on goodwill	4
Earnings before tax	5,015
Income tax	(1,380)
Consolidated net income	3,635
Minority interests	(342)
Net income, Group share	3,293
Earnings per share in euros	8.06
Diluted earning per share in euros	7.99

(1) Of which EUR 21,835 million of interest and similar income and EUR (15,688) million of interest and similar expenses.

(2) Of which EUR 14,499 million of income from other activities and EUR (13,989) million of expenses from other activities (especially relating to real estate, insurance activities and leasing).

Change in shareholders' equity and minority interests under IFRS (not incl. IAS 32 & 39 and IFRS 4)

		Capital and associated reserves
In millions of euros	Capital	Reservesassociatedwith thecapital	Eliminationoftreasurystock	Conso-lidatedreserves	Netincome,Groupshare	Share-holders'equity,Groupshare	holders'equity,minorityshare	Share- Total consolidatedshareholders'equity
IAS shareholders' equity at January 1, 2004	548	4,200	(1,139)	13,134		16,743	1,935	18,678
Increase in common stock	8	350				358		358
Elimination of treasury stock			(739)	30		(709)		(709)
2004 payment of dividends				(1,031)		(1,031)	(190)	(1,221)
Sub-total of transfersrelated to relations with shareholders	556	4,550	(1,878)	12,133		15,361	1,745	17,106
2004 Income					3,293	3,293	342	3,635
Sub-total	556	4,550	(1,878)	12,133	3,293	18,654	2,087	20,741
Effect of acquisitions and disposalson minority interests (1)Translation differences and other (2)				(78)		(78)	(14)18	(14)(60)
IAS shareholders' equity at December 31, 2004	556	4,550	(1,878)	12,055	3,293	18,576	2,091	20,667

(1) The impact of consolidation scope changes on minority interests (EUR –14 million) is mainly due to buybacks from non-group shareholders in BRD, SG Côte d'Ivoire and Sogeprom, capital reimbursments to minority shareholders in Génécal and Sogébail and the acquisition of new entities (principally the General Bank of Greece).

(2) "Translation differences and other" comprises the following items:

In millions of euros	Group share	Minority share	Total
Change in translation differences during 2004	(114)	17	(97)
Adjustments for share-based payment (a)	41	1	42
Others	(5)		(5)
Total	(78)	18	(60)

(a) The impact on shareholders' equity of restating share-based compensation payments is reconciled with the transition table for 2004 income as follows (in million of euros):

• 2004 gain/loss on share-based payments under French standards + 8

• IFRS adjustments for 2004 – 50 – 42

Transition table from the consolidated balance sheet at December 31, 2004 under French standards to the consolidated IFRS balance sheet (not incl. 32/39 and IFRS 4)

In millions of euros	Balance sheetat January 1, 2004,under French standards	Totalrestatements	Totalreclassifications	Balance sheetat January 1, 2004,under IFRS
ASSETS
Cash, due from central banks	6,755	0	0	6,755
Securities portfolio * (1)	193,567	51	(261)	193,357
Due from banks (2)	60,282	1	0	60,283
Customers loans (3)	193,547	33	(1,651)	191,929
Lease financing and similar agreements (4)	17,886	(20)	(54)	17,812
Tax assets (5)	0	166	1,348	1,514
Other assets (6)	56,548	141	111	56,800
Investments in subsidiaries and affiliates accounted for by the equity method (7)	554	8	0	562
Tangible and intangible fixed assets (8)	8,098	28	319	8,445
Goodwill (9)	2,150	37	0	2,187
Total	539,387	445	(188)	539,644
LIABILITIES
Due to central banks	2,827	0	0	2,827
Due to banks (10)	83,608	12	0	83,620
Customer deposits	196,090	0	0	196,090
Securitized debt payables	82,917	0	0	82,917
Tax liabilities (11)	0	209	2,290	2,499
Other liabilities (12)	97,727	193	(1,625)	96,295
Underwriting reserves of insurance companies (13)	41,164	(20)	0	41,144
Provisions for general risks and commitments (14)	2,849	513	(853)	2,509
Subordinated debt	10,945	0	0	10,945
Preferred shares	2,120	0	0	2,120
General reserve for banking risks (15)	312	(312)	0	0
Total liabilities	520,559	595	(188)	520,966
Shareholders' equity
Shareholders' equity, Group share
• Common stock	548	0	0	548
• Equity instruments and associated reserves	3,061	0	0	3,061
• Retained earnings and net income	13,268	(134)	0	13,134
Sub-total equity, Group share (16)	16,877	(134)	0	16,743
Minority interests (17)	1,951	(16)	0	1,935
Total equity (18)	18,828	(150)	0	18,678
Total	539,387	445	(188)	539,644

* This item includes Treasury notes, bonds, shares, equity investments and securities relating to investments of insurance companies.

Comments on the restatements of the consolidated balance sheet as at January 1, 2004: impact by theme

	IAS 19Employeebenefits	Tangiblefixedassets	Feerecognition	Provisionsbookedas aliability	Generalreservefor	Deferredtax onSogécap'sbanking capitalization	Leasefinancing	Consolidationscope	Others	Total
In millions of euros					risks	reserve
ASSETS
Securities portfolio								51		51 (1)
Due from banks								1		1 (2)
Customer loans			28					4	1	33 (3)
Lease financing and similar agreements			4				(24)			(20)(4)
Tax assets	119	36	8					3		166 (5)
Other assets	155	(4)	(38)				26	1	1	141 (6)
Investments in subsidiaries and affiliatesaccounted for by the equity method								8		8 (7)
Tangible and intangible fixed assets		4						27	(3)	28 (8)
Goodwill								34	3	37 (9)
LIABILITIES
Due to banks								12		12 (10)
Tax liabilities	2	139	(13)	6		73	1		1	209 (10)
Other liabilities			60					146	(13)	193 (12)
Underwriting reservesof insurance companies								(20)		(20)(13)
Provisions for general risks
and commitments	551			(42)				3	1	513 (14)
General reserve for banking risks					(312)					(312)(15)
ASSETS – LIABILITIES	(279)	(103)	(45)	36	312	(73)	1	(12)	13	(150)

(a) The impact of restating tangible fixed assets (EUR –103 million) is mainly due to:

• deferred tax liabilities relating to reassessment reserves for buildings revalued in 1991 and 1992 (EUR –85 million).

• deferred tax liabilities relating to the revaluation of BRD' buildings under hyperinflation accounting (EUR –14 million).

The gross values of buildings revalued in 1991 and 1992 and under hyperinflation accounting are retained at their values under French standards.

(b) Changes in consolidation scope are due to the consolidation under IFRS of 36 UCITS held as part of the Group's insurance activities and 4 companies held as part of its private equity operations (see note 2).

Impact of these adjustments on shareholders' equity:

	(16)	(17)	(18)
	Group	Minority	Total
In millions of euros	share	share
IAS 19 employee benefits	(265)	(14)	(279)
Fixed assets	(103)		(103)
Commissions	(37)	(8)	(45)
Provisions booked as a liability	35	1	36
Reversal from the General
reserve for banking risks	312		312
Deferred tax on Sogecap's
capitalization reserve	(73)		(73)
Other restatements	(3)	5	2
Shareholders' equity	(134)	(16)	(150)

SOCIÉTÉ GÉNÉRALE GROUP - 2004 ANNUAL REPORT

Comments on the reclassifications of the consolidated balance sheet as at January 1, 2004

In millions of euros	Investmentproperty ofinsurancecompanies	Assetsnot leasedaftercancellation	Sectorandcountryriskreserves (a)	Separateassets	Doubtfulloansonrentaltransactions	Reclas-sificationofemployeesbenefit	Reclas-sificationof deferedtax (b)	Reclas-sificationof currentincome tax (2)	Total
ASSETS
Securities portfolio	(265)			4					(261)(2)
Customer loans			(1,012)		(639)				(1,651)(3)
Lease financing and similar agreements		(54)							(54)(4)
Tax assets							914	434	1,348 (5)
Other assets				(4)	639		(90)	(434)	111 (6)
Tangible and intangible fixed assets	265	54							319 (8)
Total	0	0	(1,012)	0	0	0	824		(188)
LIABILITIES
Tax liabilities							824	1,466	2,290 (11)
Other liabilities						(159)		(1,466)	(1,625)(12)
Provisions for general risks and commitments			(1,012)			159			(853)(14)
Total	0	0	(1,012)	0	0	0	824		(188)

The Group is not applying IAS 32 and 39 in its 2004 financial statements. However it has nonetheless reclassified some balance sheet items to match the future IFRS 2005 presentation, for the purpose of comparability.

(a) Provisions for sector and country risk were transferred from liabilities to assets against a reduction in the Customer loans item (early application of 2005 IFRS presentation).

(b) Under IFRS, deferred tax assets and liabilities are offset within each tax unit.

Deferred tax assets as well as current tax assets were transferred from Other assets to Tax assets.

Deferred tax liabilities, previously booked as a reduction of Other assets are now booked under Tax liabilities.

Current tax liabilities were transferred from Other liabilities to Tax liabilities

Transition table from the consolidated balance sheet at January 1, 2004 under French standards to the consolidated IFRS balance sheet (not incl. IAS 32/39 and IFRS 4)

	Balance sheetat December 31, 2004,	Totalrestatements	Reclassifications	Balance sheetat December 31, 2004,
In millions of euros	under French standards			under IFRS
ASSETS
Cash, due from central banks	5,206	0	0	5,206
Securities portfolio * (1)	217,493	132	(340)	217,285
Due from banks (2)	66,114	3	0	66,117
Customers loans (3)	209,839	24	(1,679)	208,184
Lease financing and similar agreements (4)	20,636	(11)	(36)	20,589
Tax assets (5)	0	178	1,196	1,374
Other assets (6)	70,643	128	38	70,809
Investments in subsidiaries and affiliates
accounted for by the equity method (7)	343	5	0	348
Tangible and intangible fixed assets (8)	8,709	21	380	9,110
Goodwill (9)	2,106	227	0	2,333
Total	601,089	707	(441)	601,355
LIABILITIES
Due to central banks	1,505	0	0	1,505
Due to banks (10)	92,361	19	0	92,380
Customer deposits	213,433	0	0	213,433
Securitized debt payables	97,730	0	0	97,730
Tax liabilities (11)	0	208	2,203	2,411
Other liabilities (12)	111,246	175	(1,858)	109,563
Underwriting reserves of insurance companies (13)	46,828	5	0	46,833
Provisions for general risks and commitments (14)	3,042	598	(786)	2,854
Subordinated debt	11,930	0	0	11,930
Preferred shares	2,049	0	0	2,049
General reserve for banking risks (15)	284	(284)	0	0
Total	580,408	721	(441)	580,688
Shareholders' equity
Shareholders' equity, Group share
• Common stock	556	0	0	556
• Equity instruments and associated reserves	2,672	0	0	2,672
• Retained earnings	12,223	(168)	0	12,055
Net income	3,125	168	0	3,293
Sub-total equity, Group share (16)	18,576	0	0	18,576
Minority interests (17)	2,105	(14)	0	2,091
Total equity (18)	20,681	(14)	0	20,667
Total	601,089	707	(441)	601,355

* This item includes Treasury notes, bonds, shares, equity investments and securities relating to investments of insurance companies.

Comments on the restatements of the consolidated balance sheet as at December 31, 2004: impact by theme

In millions of euros	IAS 19Employeebenefits	Tangiblefixedassets	Feerecognition	Provi-sionsbookedas aliability	Generalreserveforrisks	Deferredtax onSogecap'sbanking capitalizationreserve	Leasefinancing	Conso-lidationscope	Goodwill	Others	Total
ASSETS
Securities portfolio								132			132 (1)
Due from banks								3			3 (2)
Customer loans			19					4		1	24 (3)
Lease financing and similar agreements			8				(21)			2	(11)(4)
Tax assets	119	40	15				4	3		(3)	178 (5)
Other assets	154	(5)	(46)				26	1		(2)	128 (6)
Investments in subsidiaries and affiliatesaccounted for by the equity method								5			5 (7)
Tangible and intangible fixed assets		8						23	(10)	0	21 (8)
Goodwill								32	198	(3)	227 (9)
LIABILITIES
Due to banks								19			19 (10)
Tax liabilities	5	134	(12)	5		76	5	1		(6)	208 (11)
Other liabilities	3		64					189		(81)	175 (12)
Underwriting reserves
of insurance companies								5		0	5 (13)
Provisions for general risks
and commitments	543			(29)				3		81	598 (14)
General reserve for banking risks					(284)						(284)(15)
ASSETS – LIABILITIES	(278)	(91)	(56)	24	284	(76)	4	(14)	188	1	(14)

Impact of these adjustments on shareholders' equity:

In millions of euros	(16)Groupshare	(17)Minorityshare	(18)Total
IAS 19 employee benefits	(264)	(14)	(278)
Fixed assets	(95)	4	(91)
Commissions	(41)	(15)	(56)
Lease financing	3	1	4
Provisions booked as a liability	24		24
Goodwill	186	2	188
Reversal from the General reserve
for banking risks	284		284
Tax on Sogecap's capitalization reserve	(76)		(76)
Other restatments	(21)	8	(13)
Shareholders' equity	0	(14)	(14)

The change in the impact of the restatements on the shareholders' equity between January 1, 2004 (EUR –150 million) and December 31, 2004 (EUR –14 million) amounted to EUR +136 million.

This change is due to (in millions of euros):
• the restatements on the 2004 income statement	+170
• the restatements related to IFRS 2 (share-based payments)	+42
• the cancellation of the change
in the reassessment reserves	+15
• the change in translation differences
(counter-entry for the cancellation of write-backs
of translation differences to income statement)	–90
• other restatements	–1

Comments on the reclassifications of the consolidated balance sheet as at December 31, 2004

In millions of euros	Investmentpropertyofinsurancecompanies	Assetsnotleasedaftercancellation	Sectoraland forcountryriskprovi-sions (a)	Separateassets	Doubtfulloans onrentaltransactions	Reclas-sificationofemployeebenefits	Reclas-sificationofdeferredtax (b)	Reclas-sificationofcurrentincometax (b)	Total
ASSETS
Securities portfolio	(344)			4					(340)(1)
Customer loans			(1,004)		(675)				(1,679)(3)
Lease financing and similar agreements		(36)							(36)(4)
Tax assets						1	747	448	1,196 (5)
Other assets				(4)	675	7	(192)	(448)	38 (6)
Tangible and intangible fixed assets	344	36							380 (8)
Total	0	0	(1,004)	0	0	8	555		(441)
LIABILITIES
Tax liabilities						5	555	1,643	2,203 (11)
Other liabilities						(215)		(1,643)	(1,858)(12)
Provisions for general risks and commitments			(1,004)			218			(786)(14)
Total	0	0	(1,004)	0	0	8	555		(441)

The Group is not applying IAS 32 and 39 in its 2004 financial statements. However it has nonetheless reclassified some balance sheet items to match the future IFRS 2005 presentation, for the purpose of comparability.

(a) Provisions for sector and country risk were transferred from liabilities to assets against a reduction in the Customer loans item (early application of 2005 IFRS presentation). (b) Under IFRS, deferred tax assets and liabilities were offset within each tax unit.

Deferred tax assets as well as current tax assets were transferred from Other assets to Tax assets.

Deferred tax liabilities, previously booked as a reduction of Other assets are now booked under Tax liabilities.

Current tax liabilities were transferred from Other liabilities to Tax liabilities

Transition table from the 2004 consolidated income statement under French standards to the consolidated income statement under IFRS (not incl. IAS 32 & 39 and IFRS 4)

	2004
	income underFrench standards	Goodwill(1)	Translationdifferences (2)	Share-basedpayments (3)	General reservefor banking risks (4)
Net interest income	6,161	0	0	0
Dividend income	396	0	0	0
Dividends paid on preferred shares	(144)
Commissions (revenue)	7,139	0	0	0
Commissions (expense)	(1,870)	0	0	0
Net income from financial transactions	4,217	0	0	0
Net income from other activities	517	0	0	0
Net banking income	16,416	0	0	0	0
Personnel expenses	(6,603)	0	0	(56)
Other operating expenses	(3,702)	0	0	0
Amortization and depreciation expenses
for intangible and tangible fixed assets	(662)	0	0	0
Gross operating income	5,449	0	0	(56)	0
Cost of risk	(541)	0	0	0
Operating income	4,908	0	0	(56)	0
Net income from companies accounted
for by the equity method	42	0	0	0
Net income from other assets	119	0	90	0
Impairment losses on goodwill	(186)	190	0	0
Earnings before tax	4,883	190	90	(56)	0
Exceptional items	(48)	0	0	0
Income tax	(1,398)	0	0	6
Allocation to reversal from the generalreserve for banking risks	28	0	0	0	(28)
Consolidated net income	3,465	190	90	(50)	(28)
Minority interests	(340)	(2)	0	4
Net income	3,125	188	90	(46)	(28)
Earnings per share in euros*	7.65
Diluted earning per share in euros*	7.59

* Earnings per share (EPS) are calculated on the basis of the average number of outstanding shares over the financial year, after deducting treasury stock from shareholders' equity. Diluted EPS also takes into account the existence of stock options that have been awarded but not yet exercised.

Comments on restatements and adjustments

(1) Impact of cancellation of goodwill amortization booked under French standards: EUR 190 million.

(2) Writebacks to income statement of translation differences prior to January 1, 2004, booked under French standards when consolidated subsidiaries were sold or liquidated, were cancelled under IFRS.

(3) Restatement of share-based payments had a EUR 46 million negative impact on Group net income of which EUR –41 million from application of IFRS 2 and EUR –5 million from the restatement of a stock option plan.

(4) A EUR 28 million writeback from the General reserve for banking risks under French standards was cancelled under IFRS as the GRBR was transferred to Retained earnings at January 1, 2004.

Restatements					Total	Reclassifications (9)	2004
Provisions (5)	Tangiblefixed assets (6)	Fee recognition (7)	Employeebenefits (8)	Otherrestatements	restatements		incomeunder IFRS
(14)	(3)	(25)	7	3	(32)	18	6,147
			0	0	0		396
					0		(144)
		(33)	0	0	(33)	0	7,106
		39	0	0	39	0	(1,831)
			0	5	5	0	4,222
		(1)	0	32	31	(38)	510
(14)	(3)	(20)	7	40	10	(20)	16,406
1		10	(73)	(22)	(140)	0	(6,743)
	(2)	2	60	(9)	51	0	(3,651)
	(5)		0	(1)	(6)	0	(668)
(13)	(10)	(8)	(6)	8	(85)	(20)	5,344
1			0	0	1	(28)	(568)
(12)	(10)	(8)	(6)	8	(84)	(48)	4,776
			0	(2)	(2)	0	40
	(13)		0	(1)	76	0	195
			0	0	190	0	4
(12)	(23)	(8)	(6)	5	180	(48)	5,015
			0	0	0	48	0
1	19	2	2	(12)	18	0	(1,380)
			0	0	(28)	0	0
(11)	(4)	(6)	(4)	(7)	170	0	3,635
	(3)	1	1	(3)	(2)	0	(342)
(11)	(7)	(5)	(3)	(10)	168	0	3,293
							8.06
							7.99

(5) Discounting to present value of provisions booked as a liability gave rise to a EUR 11 million charge against Group net income.

(6) Application of a component-based approach to Group tangible fixed assets and the cancellation of the writeback from reassessment reserves booked under French standards on the sale of fixed assets, gave rise to a EUR 7 million charge against Group net income.

(7) The staggering of commissions gave rise to a EUR 5 million reduction in Group net income.

(8) Application of IAS 19 on employee benefits gave rise to a EUR 3 million reduction in Group net income.

(9) Exceptional items booked under French standards were transferred to the appropriate items under IFRS. The change in estimate of income invoiced for maintenance services provided in connection with operating leasing activities (EUR –20 million) is restated in net banking income.

The provision booked to cover the fraud affecting Cowen's former private client brokerage division (EUR –28 million) is restated in cost of risk.

Interest incomes and expenses of the leasing activities are restated in net income from other activities.

SOCIÉTÉ GÉNÉRALE GROUP - 2004 ANNUAL REPORT

2004 consolidated income statement by business line

		Retail Banking& Financial Services			Global InvestmentManagement & Services			Corporate & InvestmentBanking			Corporate Center			Group
In millions of euros	2004IFRS	FR	2004 Change	2004IFRS	2004 ChangeFR		2004IFRS	2004 ChangeFR		2004IFRS	FR	2004 Change	2004IFRS	FR	2004 Change
Net banking income	9,675	9,685	(10)	2,265	2,266	(1)	4,727	4,697	30	(261)	(232)	(29)	16,406	16,416	(10)
Operating expenses	(6,374)	(6,346)	(28)	(1,649)	(1,631)	(18)	(2,924)	(2,887)	(37)	(115)	(103)	(12)	(11,062)	(10,967)	(95)
Gross operating income	3,301	3,339	(38)	616	635	(19)	1,803	1,810	(7)	(376)	(335)	(41)	5,344	5,449	(105)
Cost of risk	(589)	(589)	0	(7)	(8)	1	61	60	1	(33)	(4)	(29)	(568)	(541)	(27)
Operating income	2,712	2,750	(38)	609	627	(18)	1,864	1,870	(6)	(409)	(339)	(70)	4,776	4,908	(132)
Net income from companiesaccounted for by the equity
method	5	5	0	0	0	0	26	28	(2)	9	9	0	40	42	(2)
Net income from other assets	19	33	(14)	2	2	0	16	16	0	158	68	90	195	119	76
Impairment of goodwill	0	0	0	0	0	0	0	0	0	4	(186)	190	4	(186)	190
Exceptional items	0	0	0	0	0	0	0	0	0	0	(48)	48	0	(48)	48
General reserve for banking risk	0	0	0	0	0	0	0	0	0	0	28	(28)	0	28	(28)
Income tax	(937)	(955)	18	(187)	(193)	6	(447)	(449)	2	191	199	(8)	(1,380)	(1,398)	18
Net income
before minority interests	1,799	1,833	(34)	424	436	(12)	1,459	1,465	(6)	(47)	(269)	222	3,635	3,465	170
Minority interests	(218)	(218)	0	(43)	(44)	1	(6)	(6)	0	(75)	(72)	(3)	(342)	(340)	(2)
Net income	1,581	1,615	(34)	381	392	(11)	1,453	1,459	(6)	(122)	(341)	219	3,293	3,125	168

Notes to the consolidated financial statements

Note 1 - First time adoption of IFRS (1)

Context

In accordance with European Regulation 1606/2002 of July 19, 2002 on international accounting standards, the Société Générale Group will prepare its consolidated financial statements for the year ending December 31, 2005 in accordance with IAS/IFRS international accounting standards in force at December 31, 2005 approved by the European Union. The first set of accounts to be prepared under IAS/IFRS standards will be those for 2005, but comparative 2004 data will also be presented under the same standards, except for IAS 32 and IAS 39 and IFRS 4 which will be applied as from January 1, 2005.

As part of its preparations for the publication of the comparative financial statements for 2005, and according to the recommendation of French Securities Regulator the Autorité des Marché Financiers (AMF), on financial communication during the transition, Société Générale Group has prepared financial information for 2004 on the transition to IAS/IFRS, giving preliminary forecast figures for the impact that transition to IFRS is likely to have on:

• the balance sheet at January 1, 2004: the definitive impact of the transition on shareholders' equity will be applied to this date when the 2005 consolidated accounts are published (the impact of transition to IAS 32 and IAS 39 and IFRS 4 will be recognized in shareholders' equity as at January 1, 2005);

• the financial position at December 31, 2004 and income for financial year 2004.

The financial information for 2004 on the quantitative impact of the transition to IFRS was prepared by applying to 2004 data the same IFRS standards and interpretations that Société Générale intends to use in preparing its comparative consolidated accounts for December 31, 2005. The 2004 financial information in these notes was therefore prepared according to:

• all the IFRS standards and interpretations that will be mandatory for the December 31, 2005 financial statements insofar as they are already known;

• the same options and exemptions as the Group is likely to apply in preparing its first consolidated financial statements under IFRS in 2005.

For these reasons, it is possible that the opening balance sheet presented here may differ from that on which the consolidated accounts for 2005 will be based.

Standards applied

The financial information presented below has been prepared in accordance with the standards and interpretations published by the IASB and approved by the European Union as at the end of February 2005. For the significant accounting principles used in valuing and presenting comparative data for 2004, refer to Note 2.

The Société Générale Group has decided, as is allowed under IFRS 1, to delay first-time application of IAS 32, IAS 39 and IFRS 4 until January 1, 2005. For the main changes in accounting principles resulting from the application of these three standards, refer to Note 3.

Methods of first-time adoption of IFRS at January 1, 2004

International accounting standards were applied for the first time to the Société Générale Group's consolidated financial statements at January 1, 2004 in accordance with IFRS 1. Under IFRS 1 the standards are applied retrospectively and the shareholders' equity item on the opening balance sheet for January 1, 2004 includes the impact of the change in accounting principles from the French standards applied until December 31, 2003.

IFRS 1 allows special treatment options for some items on first-time adoption of IFRS. The Société Générale Group has opted for the following treatments:

■ Business combinations (IFRS 3): the Société Générale Group has opted not to restate acquisitions made before January 1, 2004, as allowed under IFRS 3. As such, goodwill on acquisitions financed by capital increases before January 1, 2000 has not been restated in the opening balance sheet for January 1, 2004, provided that this goodwill was charged against additional paid-in capital in proportion to the part of the total purchase price covered by the capital increase, in line with the French standards.

(1) IFRS: the version of international accounting standards adopted by the European Union.

■ Fair value of tangible fixed assets (IAS 16 and IAS 40): the Société Générale Group opted to maintain tangible fixed assets at their historical cost. For fixed assets previously revalued in the 1977 or 1978 regulatory restatements and/or affected by the restructuring and transfer of asset components within the Group on December 31, 1991, historical cost is taken to mean their value as restated at those dates.

■ Employee benefits (IAS 19): the Société Générale Group opted, as allowed under IFRS 1, to book the balance of any unrecognized actuarial gains and losses to shareholders' equity at the transition date.

■ Cumulative translation differences (IAS 21): the Group booked to Retained earnings differences arising on translation of foreign currency financial statements at January 1, 2004 totaling Euro 1,351 million. This adjustment has no effect on total shareholders' equity in the opening balance sheet at January 1, 2004. Any gains or losses from the future sale of the entities concerned will not include a writeback of translation differences dating from before January 1, 2004 but will include translation differences posted after this date.

■ Share-based payments: for plans settled in shares, the Group opted to apply IFRS 2 to plans opened since November 7, 2002, which had not vested at January 1, 2005. For plans settled in cash, the Group opted to apply IFRS 2 to plans that had not yet been settled at January 1, 2005.

Presentation of comparative data for 2004

As IAS 32 and IAS 39 on financial instruments were not applied in preparing comparative data for 2004, financial instruments will be valued and presented differently in the 2004 and 2005 accounts.

The format of the summary financial statements presenting the comparative data for 2004 has been adjusted to make it structurally comparable with the format for summary financial statements proposed in CNC recommendation 2004 R 03 of October 27, 2004 on IFRS financial statements to be prepared by companies that come under the French Consultative Committee on Financial Regulation and Legislation (French acronym: CCLRF).

Note 2 - Main principles governing valuation and presentation of comparative data in the 2004 financial statements

IFRS 1 on first-time adoption of International Financial Reporting Standards allows application of IAS 32 and 39 on financial instruments and of IFRS 4 on insurance contracts to be deferred and so the Group's consolidated financial statements will only be prepared according to these standards from 2005. Comparative information for 2004 on instruments and transactions covered by these standards therefore continues to be valued and presented in accordance with French accounting standards as described in Note 1 of the French consolidated financial statements for 2004.

French accounting standards have for several years been gradually converging towards international standards. As a result, some of the accounting treatments applied to the Group's published consolidated financial statements for 2004 do not significantly differ from international standards.

The sections below describe the main outstanding differences from French accounting standards described in note 1 of the consolidated accounts for 2004, for all instruments and transactions other than those covered by IAS 32 and 39 and IFRS 4.

Consolidation principles and procedures

The consolidated financial statements were prepared from individual annual financial statements of Société Générale, all significant subsidiaries controlled by Société Générale and all associates. Subsidiaries whose closing date differs from that of the parent by more than three months prepared interim financial statements as at December 31 for the 12 preceding months.

The main differences affecting the scope and methods of consolidation relate to the assessment of control exercised over a subsidiary, consolidation criteria for special purpose entities (SPEs), treatment of entities acquired or set up with the intention of selling all or part of them, and treatment of goodwill.

Assessment of control (IAS 27 and 28)

Companies over which Société Générale exercises exclusive control are subject to a full consolidation.

Compared with French standards, international accounting standards define exclusive control as the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities, whether by virtue of:

• direct or indirect ownership of the majority of voting rights in the subsidiary;

• the power to appoint or remove the majority of the members of the subsidiary's governing, management or supervisory bodies, or to cast the majority of the voting rights at meetings of these bodies;

• the power to exercise a dominant influence over the subsidiary through an agreement or provisions in the company's charter or bylaws.

The Group has chosen to maintain a proportionate consolidation of companies over which it exercises a joint control, using the same procedures as those applied under French standards.

Companies over which the Group exercises significant influence are accounted for under the equity method, using the same procedures as those applied under French standards.

When assessing whether a group controls or significantly influences a subsidiary, international accounting standards take a broader view of the voting rights involved, taking into account the effects potential voting rights conferred by instruments that can be exercised or converted at any time, such as call options on outstanding ordinary shares on the market or bonds convertible into new ordinary shares.

Consolidation of special purpose entities (SIC 12)

Legally independent bodies (special purpose entities) over which the Group exercises effective control are consolidated even where it has no stake in the capital. Exceptions that were previously applied according to French consolidation standards are no longer applicable. The key criteria used to determine whether such control exists differ from those laid down in French regulations and can be summarized as follows:

• The activities of the SPE are being conducted on behalf of the Group so that the Group obtains benefits.

• The Group has the decision-making powers to obtain the majority of the benefits of the SPE's ordinary activities, whether or not this control has been delegated through an "autopilot" mechanism.

• The Group has rights to obtain the majority of the benefits of the SPE.

• The Group retains the majority of the risks related to the SPE.

Subsidiaries acquired and held for the sole purpose of sale (IAS 27 and IFRS 5)

Under IFRS, unlike French standards, wholly owned subsidiaries must continue to be consolidated even if the Group has always intended, from the time they were acquired, to sell them. This could have implications for the reporting of subsidiaries related to private equity investments. In the case of subsidiaries considered as non-current assets intended for disposal within twelve months, and for which the Group is already actively seeking a buyer, their total assets and total liabilities are shown on two specific lines of the consolidated balance sheet.

Consolidation scope

Consolidation scope under IFRS includes 723 entities as at December 31, 2004:

• 642 fully consolidated companies;
• 65 proportionately consolidated companies;
• 16 companies accounted for by the equity method.

The differences between the consolidation scopes under French standards and IFRS are due to the following elements:

• Consolidation of 36 mutual funds held for the purpose of insurance activities, of which 24 are fully consolidated and 12 are proportionately consolidated. As an exception, French accounting regulations did not require the consolidation of these entities.

• Consolidation of 4 companies related to private equity investments, of which 2 are fully consolidated and 2 are accounted for by the equity method. These entities were not consolidated under French standards since they were intended for disposal.

Treatment of acquisitions and goodwill (IFRS 3)

Under French standards, identifiable assets, liabilities and off-balance sheet items in an acquired subsidiary were initially valued at their market value or their likely net realizable value if they were not intended for operational use. If intended for operational use, they were valued at their value in use, calculated as a global figure for all items contributing to intermediation activities.

Under IFRS, each identifiable asset, liability and off-balance sheet item must be booked at its fair value at the acquisition date, regardless of its purpose. The analysis and professional appraisals required for this initial valuation must hence forward be carried out within 12 months from the date of acquisition as must any adjustments to the value based on new information.

Any surplus of the purchase price above the acquired share of these net revalued assets is booked on the asset side of the consolidated balance sheet under Goodwill. Any deficit is immediately booked to income.

Goodwill is carried on the balance sheet at cost denominated in the subsidiary's reporting currency, and translated into Euro at the official exchange rate as at the closing date.

Goodwill is no longer amortized, but it is tested for impairment whenever there is any indication that its value may have diminished and at least once a year. At the acquisition date each item of goodwill is attributed to one or more cash-generating units expected to derive benefits from the acquisition. Any impairment of goodwill is calculated based on the recoverable value of the relevant cash-generating units. If the recoverable amount of the cash-generating units is less than their carrying amount an irreversible impairment is booked to the consolidated income statement for the period under Impairment losses on goodwill.

Accounting policies and valuation methods

Leases (IAS 17)

Leases are classified as finance leases if they transfer substantially all the risks and rewards incident to ownership of an asset to the lessee. Otherwise they are classified as operating leases.

Finance lease receivables are booked under Lease financing and similar agreements and represent the Group's net investment in the lease, calculated as the minimum lease payments to be received from the lessee plus any unguaranteed residual value discounted at the interest rate implicit in the lease.

Interest included in the lease payments is booked under Net interest income on the P&L such that the lease generates a constant periodic rate of return on the lessor's net investment.

International standards require systematic review of the unguaranteed residual values used to calculate the lessor's gross investment in a finance lease. If these values should fall, a charge is booked to adjust the financial income previously recorded.

Operating lease assets are booked on the balance sheet under Tangible and intangible fixed assets. If the lease is on a building it is booked under Investment Property. Lease payments are booked on a straight-line basis over the life of the lease under income item Net Income from other activities.

Property, plant & equipment (IAS 16, 36, 38, 40)

Operating and investment fixed assets are booked on the balance sheet at cost. Borrowing costs incurred to fund the acquisition or a lengthy construction period of the fixed assets are included in the acquisition cost, as well as direct attributable costs. Investment subsidies received are deducted from the cost of the relevant assets.

Software designed in-house is booked as an asset on the balance sheet at its direct cost of development, calculated as spending on external supplies and services and personnel costs directly attributable to producing the asset and making it ready for use.

Under IFRS, unlike French standards applied until 2004, any residual value in an asset shall be taken into consideration for depreciation purposes, and the depreciation shall be computed using a component approach:

• As soon as the assets are fit for use as intended by the Group, fixed assets are depreciated over their useful life by straight-line or diminishing balance method where this reflects the expected pattern of economic benefits from the asset. Any residual value of the asset is deducted from its depreciable amount.

• Where one or several components of a fixed asset are used for different purposes or to generate economic benefits over a different time period from the asset considered as a whole, these components are depreciated over their own useful life.

For operating and investment property, the Group applied this approach through a breakdown of these assets into at least the following components and related depreciation periods:

Infrastructure	Major structures	50 years
	Doors and windows, roofing	20 years
	Façades	30 years
Technical	Elevators
installations	Electrical installations
	Electricity generators
	Air conditioning, extractors	10-30
	Technical wiring	years
	Security and surveillance installations
	Plumbing
	Fire safety equipment
Fixtures and fittings	Finishings, surroundings	10 years

Depreciation periods for the other categories of fixed assets depend on their useful life, usually estimated in the following ranges:

• Plant and equipment	5 years
• Transport	4 years
• Furniture	10-20 years
• Office equipment	5-10 years
• IT equipment	3-5 years
• Software, developed or acquired	3-5 years
• Concessions, patents, licenses, etc.	5-20 years

Fixed assets are tested for impairment whenever there is any indication that their value may have diminished, and at least once a year as far as intangible fixed assets are concerned. The existence of any indication of impairment shall be assessed at each reporting date. These tests are carried out on assets grouped by cash-generating unit. Where an impairment loss is established, it shall be booked on the income under the item Amortization and depreciation expenses for intangible and tangible fixed assets. This impairment loss will reduce the depreciable amount of the asset and will also lead to a prospective modification of its depreciation schedule.

Realized capital gains or losses on operating fixed assets are booked under Net Income from other activities, while profits on investment assets are booked under Net Banking Income.

Non-current assets held for sale (IFRS 5)

If the Group has begun actively seeking to sell the asset and it is highly likely that the asset will be sold within twelve months, the assets concerned and any liabilities directly associated with them are booked under Non-current assets held for sale and Liabilities associated with non-current assets held for sale on the balance sheet.

Unrealized capital losses — the difference between the fair value net of disposal costs of non-current assets or groups of assets held for sale and their net book value — are recognized by a provision for impairment booked to income. Note that, once declassified, noncurrent assets held for sale are no longer depreciated.

Provisions for general risks and commitments – except for credit risk and employee benefits (IAS 37)

Provisions for general risks and commitments, other than those arising from credit risk or employee benefit schemes, are liabilities whose timing or amount cannot be precisely determined. A provision shall be recognized when the entity has a present obligation towards a third party that will probably or necessarily lead to an outflow of resources to the third-party without compensation for at least an equivalent amount being expected from this third party.

Unlike under French standards, the expected outflows are discounted to present value to determine the amount of the provision, where this discounting has a significant impact. The provision allowances and reversals are booked to income for the relevant future expense.

These provisions include provisions for sundry and legal risks, as well as restructuring charges.

General reserve for banking risks (IAS 30 and 37)

International standards do not allow the recording through income of a general reserve for banking risks.

The general reserve for banking risks that appeared on the liabilities side of the Group's consolidated balance sheet at December 31, 2003 was transferred to shareholders' equity in the opening balance sheet under IFRS for 2004.

Transactions denominated in foreign currency (IAS 21)

At the closing date, monetary assets and liabilities denominated in foreign currencies are converted into the entity's accounting currency at the prevailing spot exchange rate. Realized or unrealized forex losses or gains are booked to income.

International standards specify a particular treatment for non-monetary assets denominated in foreign currencies, including shares and other variable income securities that are not part of the trading portfolio. Their value is translated into the entity's accounting currency at the exchange rate applying when they were acquired. Translation losses or gains on these assets are only booked to income when the assets are sold or impaired.

However, if the non-monetary assets are funded by a liability that is denominated in the same currency, they are converted at the spot rate prevailing at the balance sheet date.

Employee benefits (IAS 19)

Group companies, in France and abroad, may grant their employees: • post-employment benefits, such as pension plans or retirement payments;

• long-term benefits such as deferred bonuses, long service awards or the Time Saving Account;

• termination benefits.

Some of Société Générale's retired workers enjoy other post-employment benefits such as medical insurance.

Post-employment benefits

Pension plans may be defined contribution or defined benefit.

Under IAS 19, the valuation method and accounting treatment are more precisely defined than under French Standards, leading to an increase in the scope of employee commitments to be considered.

Defined contribution plans limit the company's liability to the subscriptions paid into the plan but do not commit the company to a specific level of future benefits. Contributions paid are booked as an expense for the year in question.

Defined benefit plans commit the company, either formally or constructively, to pay a certain amount or level of future benefits, and the company therefore bears the medium- or long-term risk.

Provisions are booked on the liabilities side of the balance sheet under Provisions for general risks and commitments to cover the whole of these retirement obligations. The obligations are revalued regularly by independent actuaries using the projected unit credit method. This valuation technique incorporates assumptions about demographics, early retirement, salary rises and discount and inflation rates.

When these plans are financed from external funds classed as plan assets, the fair value of these funds is subtracted from the provision to cover the obligations.

Differences arising from changes in the calculation assumptions (early retirements, discount rates, etc.) or arising from differences between actuarial assumptions and real performance (return on plan assets) are booked as actuarial gains or losses. They are amortized in the income statement according to the "corridor" method: i.e. over the expected average remaining working lives of the employees participating in the plan, as soon as they exceed the greater of:

• 10% of the present value of the defined benefit obligation (before deducting plan assets);

• 10% of the fair value of the assets at the end of the previous financial year.

Where a new or amended plan comes into force the cost of past services is spread over the remaining period until vesting.

An annual charge is booked under Personnel expenses for defined benefit plans, consisting of:

• additional entitlements vested by each employee (current service cost);

• the financial expense resulting from discount rate;
• expected return on plan assets (gross return);
• amortization of actuarial gains and losses and past service cost;
• settlement or curtailment of plans.

Long-term benefits

These are benefits paid to employees more than 12 months after the end of the period in which the employees render the related service. Long-term benefits are measured in the same way as post-employment benefits, except for the treatment of actuarial gains and losses and past service costs which are booked immediately to income.

Payments based on Société Générale shares or shares issued by a consolidated entity (IFRS 2)

Share-based payments include:

• payments in equity instruments of the entity;

• cash payments whose amount depends on the performance of equity instruments.

Unlike under French standards, share-based payments give rise to a personnel expense under IFRS as follows.

Option plans

The Group awards some of its employees stock purchase or subscription options.

The options are measured at their fair value when the employees are first notified, without waiting for the conditions that trigger the award to be met, nor for the beneficiaries to exercise their options.

Group stock-option plans are measured using a binomial formula when the Group has adequate statistics to take into account the behavior of the option beneficiaries. When such data are not available, the Black & Scholes model is used. Valuations are performed by independent actuaries.

For equity-settled share-based payments, the fair value of these options, measured at the grant date, is spread over vesting period and booked to additional paid-in capital under shareholders equity. At each accounting date, the number of options expected to be exercised is revised and the overall cost of the plan as originally determined is adjusted. Expenses booked since the start of the plan are then adjusted correspondingly.

For cash-settled share-based payments, the fair value of the options is booked as an expense over vesting period of the options against a corresponding entry under liabilities on the balance sheet. This payables item is then remeasured at fair value until settled.

Global Employee Share Ownership plan

Every year the Group carries out a capital increase reserved for current and former employees. New shares are offered at a discount with an obligatory five-year holding period.

The resultant benefit to the employees is booked by the Group as an expense for the year. The benefit is calculated as the difference between the fair value of each share acquired, taking account of the obligatory holding periods and the acquisition price paid by the employee, multiplied by the number of shares subscribed.

Net fees for services (IAS 18)

Fee income and expense for services provided and received are recognized in different ways depending on the type of service.

Fees for continuous services, such as payment services, custody fees, or telephony subscriptions are booked to income over the lifetime of the service. Fees for one-off services, such as fund movements, finder's fees received, arbitrage fees, or penalties following payment incidents are booked to income when the service is provided.

In syndication operations, underwriting fees and participation fees proportional to the share of the issue placed are booked to income at the end of the syndication period on condition that the effective interest rate for the share of the issue retained on the Group's balance sheet is comparable to that applying to the other members of the syndicate. Arrangement fees are booked to income when the placement is legally complete.

Income tax (IAS 12)

IFRS treatments for deferred tax differ from French standards on the following points:

• International standards do not allow deferred tax assets and liabilities to be discounted to present value. French rules allowed this where it was possible to define a precise schedule for payment.

• All differences between the carrying value of each asset and liability recorded in the balance sheet and their tax value shall lead to a deferred tax provided these differences will affect future tax payments. • Deferred tax assets and liabilities shall be measured at the tax rates that are expected to apply to the period when the asset is realized or the liability is settled, based on the tax rates that have been enacted

or substantively enacted by the balance sheet date.

Note 3 – Accounting principles applicable in 2005

The accounting principles that would be applied in 2005 include those described in the Note 2 and the provisions applicable to financial instruments and transactions which are under the scope of IAS 32 and 39 on financial instruments and IFRS 4 on insurance contracts as they are described in the present Note.

As mentioned in Note 2, for comparative figures of 2004, the financial instruments and transactions which fall under the scope of IAS 32 and 39 and IFRS 4 have been accounted for according to the French accounting principles applied by the Group in compliance with the provisions of Regulation 99-07 and 2000-04 of the French Accounting Regulation Committee (Comité de la Réglementation Comptable), as detailed in the Note 1 to the 2004 consolidated financial statements.

For these instruments and transactions, these accounting principles are, in certain aspects, different from those which will be used to prepare the 2005 and following consolidated financial statements in application of IAS 32 and 39 and IFRS 4 in the form endorsed by the European Community. The main differences are the following:

Financial instruments (IAS 32 and 39)

Classification and valuation of securities portfolio

Group securities portfolio accounting classification is modified by IAS 39. The securities, previously recorded as trading securities, short-term investment securities and long-term investment securities and as shares intended for portfolio activities, investments in nonconsolidated subsidiaries and affiliates, and other long-term equity investments will be classified in the four following categories:

■ Financial assets at fair value through profit or loss. These are financial assets held for trading purposes, they will be measured at fair value and this fair value revaluation will be recorded in the income statement of the period.

■ Held to maturity investments. These are non-derivative financial assets with fixed and determinable payments and fixed maturity that the Group has the positive intention and ability to hold to maturity. Contrary to French accounting standards, held to maturity assets cannot be hedged against interest rate risk. They are measured at amortized cost, taking into consideration premiums and discounts, and transaction costs.

■ Available for sale financial assets are non-derivative financial assets held for an undetermined period and that the Group could sell at any time. These are financial assets that cannot be classified in the two previous categories. These financial assets are measured at fair value through shareholders' equity and accrued or earned income on these assets is booked through profit and loss. Revaluation differences, excluding this income, are booked in a specific item under shareholder's equity. Cumulative gains or losses previously recognized in this specific item under shareholders' equity shall be recognized in profit and loss in the event of disposal or impairment. Impairment losses on equity instruments are not reversible.

■ The held for trading assets category will also include the financial assets designated by the Group for valuation at fair value through profit or loss in compliance with the fair value option. Under the version of IAS 39 endorsed by the European Community, the use of the fair value option is restricted to financial assets. This limitation is scheduled to be reviewed under the amendment process for IAS 39 launched by the IAS 13, which will specify the conditions for the application of the fair value option for the valuation of financial assets and liabilities.

Loans and receivables

Contrary to French standards, loans and receivables are initially measured at their fair value plus transaction costs. They are subsequently measured at amortized cost using the effective interest rate which takes into consideration all contractual cash-flows.

Derivatives and hedging

According to IAS 39, all derivatives shall be recognized at fair value in the balance sheet. These financial instruments will be considered as trading instruments and subsequently measured at fair value through the income statement except for those instruments designated as hedging instruments for which the expected effectiveness of the hedge with respect to the hedged instrument is adequately documented and has been verified a posteriori.

Derivatives designated as hedging instruments in a fair value hedge will be measured at fair value through the income statement in symmetry with the hedged items which will also be remeasured in profit or loss for the gain or loss attributable to the hedged risk.

Gains or losses on derivatives designated as hedging instruments in a cash flow hedge will be recognized directly in a specific item under shareholders' equity, and the ineffective portion of the gain or loss on the hedging instrument will be recognized in the income statement.

European Regulation No. 2086/2004 has endorsed IAS 39 with the carve-out of some requirements in order to facilitate:

• the use of fair value hedge accounting for macro-hedging derivatives used in Asset & Liability Management in order to hedge the Group's fixed rate gaps from interest rate fluctuations (including customer demand deposits);

• the effectiveness test required by the standard.

Accordingly, Société Générale has decided to prepare its consolidated financial statements in accordance with this carve-out version of IAS 39.

Embedded derivatives

An embedded derivative is a component of a hybrid instrument. Under IFRS, unlike French standards, provided this hybrid instrument is not measured at fair value through income statement, the embedded derivative must be separated from its host contract if its economic characteristics and risks are not closely related to the economic characteristics and risks of the host contract, and if it meets the definition of a derivative.

Fair value

When a financial instrument is quoted in an active market, the market price is considered as the best estimate of the fair value to be used for its valuation. If them is no active market, the fair value shall be established using valuation models and techniques incorporating observable market parameters. If the observability of such items is not documented, the income, previously recorded up front under French standards at the date of issuance of some financial instruments, will be deferred.

Société Générale has chosen to apply these provisions to the only transactions originated after October 25, 2002.

Allowances for credit risk

The criteria to be used under IFRS to assess whether there is objective evidence that a financial asset is impaired for credit risk are similar to those applied under French regulations to assess whether a receivable is doubtful.

But the amount of the provisions shall be now determined on the basis of the present value of estimated future cash flows discounted at the financial asset's original effective interest rate. Allocations to and write-backs of provisions are recorded in P&L under Cost of risk. The progressive reversal of the discount is deemed to be income from the impaired loans and is booked under Net interest income.

Furthermore, when the evidence of impairment is collectively assessed on a group of financial assets with similar credit risk characteristics, the incurred credit risk is recorded through a collective provision pending the identification of impairment losses on individual assets. Part of provisions for country risks, as documented in the accounts under French standards, will be reviewed in the light of IFRS.

Commitments related to mortgage savings accounts (épargne-logement)

When the specific commitments linked to these regulated French savings instruments are expected to generate future adverse effects for the Group, a provision is booked on the liabilities side of the balance sheet. For the purposes of this assessment, savings accounts with similar terms and conditions are grouped and then collectively provisioned. There was no provision previously recorded under French standards.

Distinction between liabilities and equity

Issued financial instruments shall be considered as financial liabilities or equity instruments pending on the existence of a contractual obligation by the issuer to deliver cash to the holder of the instruments.

According to the terms of IAS 32 used to analyse the substance of these instruments, undated subordinated securities issued by the Group would be considered as debts. But preferred shares issued by the Group would be considered as equity instruments and the remuneration paid to the holders will be accounted for as distributions.

Treasury shares

Société Générale shares acquired by the Group will be deducted from consolidated shareholders' equity, regardless of the purpose for which they are held. The related gain or loss will be removed from the consolidated P&L. Under French standards, treasury shares held for trading purposes or bought with the view to allocating them to employees were kept among assets in the consolidated balance sheet.

Insurance contracts (IFRS 4)

Classification and valuation of the contracts

Provisions of IAS 39 applicable to financial instruments, as described here before, will be applied for the valuation of contracts that do not fall under the scope of IFRS 4.

Technical reserves

Existing French regulations on the valuation of technical reserves are maintained. The Provision for Deferred Profit-Sharing will be adjusted according to the policyholders' rights to gains or their contribution to losses recognized on the revaluation of financial assets at fair value. Furthermore, a test will be performed to assess whether the amount of technical reserves is adequate according to IFRS 4 (Liability adequacy test).

Note IAS 4 - Employee benefits

(In millions of euros at December 31)

A. Post-employment defined contribution plans

Defined contribution plans limit the Group's liability to the contributions paid to the plan but do not commit the Group to a specific level of future benefits.

The main defined contribution plans provided to employees of the Group are located in France. They include State pension plans and other national retirement plans such as ARRCO and AGIRC.

B. Post-employment defined benefit plans and other long-term benefits

B1. Reconciliation of assets and liabilities recorded in the balance sheet

			2004
		Post employment benefits		Other	Total
		Pensionplans	Others	long-termbenefits
Reminder of gross liabilities		2,026	153	338	2,517
Reminder of plan assets		(1,537)	0	(47)	(1,584)
Deficit in the plan (Net balance)		489	153	291	933
Breakdown of the deficit in the plan
Present value of defined benefit obligations		1,854	0	72	1,926
Fair value of plan assets		(1,757)	0	(47)	(1,804)
Actuarial deficit (net balance)	A	97	0	25	122
Present value of unfunded obligations	B	242	156	266	664
Other items recognized in balance sheet	C
Unrecognized items
Unrecognized Past Service Cost		40	0	0	40
Unrecognized Net Actuarial (Gain)/Loss		30	3	0	33
Separate assets		(5)	0	0	(5)
Plan assets impacted by change in Asset Ceiling		(215)	–	–	(215)
Total unrecognized items	D	(150)	3	–	(147)
Deficit in the plan (Net balance)	A+B+C–D	489	153	291	933

Notes

1. For pensions and other post-employment plans, actuarial gains and losses, which exceed 10% of the greater of the defined benefit obligations or funding assets, are amortized over the estimated average remaining working life of the employees participating in the plan in accordance with the option under IAS 19. Regarding the 2004 opening balance sheet, all actuarial gains and losses have been recorded directly in the shareholder's equity in accordance with IFRS1 option.

2. Pension plans include pension benefits as annuities and end of career payments. Pension benefit annuities are paid additionally to state pension plans. The Group grants 89 pension plans located in 31 countries. 10 pension plans located in France, the UK, Germany, the US and Switzerland represents 86% of gross liabilities of these pension plans.

Other post employment benefit plans are healthcare plans. These 10 plans are located in 7 countries, with France representing 90% of gross liabilities.

Other long-term employee benefits include deferred bonuses, Time Saving Accounts and long-service awards. There are 84 schemes located in 24 countries. 60% of gross liabilities are located in France.

1. The present values of defined benefit obligations have been valued by independant qualified actuaries.

2. Information regarding plan assets

The breakdown of the fair value of plan assets is as follows: 43% bonds, 42% equities, 9% monetary instruments and 6% others.

For pension plans with a fair value of plan assets in excess of defined benefit obligations, the aggregate of plan assets is EUR 245 million, including EUR 216 million unrecognized.

Separate assets (3 benefit plans) are insurance contracts with related Group companies covering post-employment benefits.

2004 Consolidated financial statements under IFRS

B2. Reconciliation of charges recognized in the income statement

		2004
	Post employment benefits		Other	Total
	Pensionplans	Others	long-termbenefits
Current Service Cost including Social Charges	51	3	77	131
Employee contributions	(2)	0	0	(2)
Interest Cost	94	7	6	107
Expected Return on Plan Assets	(80)	0	(3)	(83)
Expected Return on Separate Assets	(0)	0	0	0
Amortisation of Past Service Cost	3	0	0	3
Settlement, Curtailment	0	0	0	(0)
Transfers from non recognized assets	0	0	0	0
Amortisation of Losses (Gains)	0	0	4	4
Total Charges	66	10	84	160

The actual return on plan and separate assets were, in millions of euros

		2004
Plan Assets	112	0	4	116
Separate Assets	0	0	0	0

B3. Movements in the present value of defined benefit obligations included in the balance sheet

		2004
	Post employment benefits		Other	Total
	Pensionplans	Others	long-termbenefits
At January 1	456	151	236	843
Foreign exchange adjustments	(3)	(0)	(4)	(7)
Amounts recognized in the income statement	65	10	85	160
Employer Contributions to plan assets	(40)	–	(4)	(44)
Unfunded Benefit payments	(18)	(8)	(22)	(48)
Changes in consolidation scope	29	–	–	29
Transfers and others	–	–	–	–
At December 31	489	153	291	933

B4. Main actuarial assumptions

	2004
Discount rate
Europe	2.25% - 5.43%
Americas	2.55% - 6.07%
Asia-Oceania	0.78% - 5.40%
Expected return on plan assets (separate and plan assets)
Europe	2.84% - 7.40%
Americas	6.50% - 6.50%
Asia-Oceania	1.25% - 1.25%
Future salary increase
Europe	0.5% - 3.46%
Americas	2% - 2%
Asia-Oceania	1% - 4%
Healthcare cost increase rate
Europe	4.55% - 10%
Americas	NA
Asia-Oceania	0.8% - 2.3%
Average and remaining working life of employees (in years)
Europe	2.6 - 21.6
Americas	9.6 - 21.5
Asia-Oceania	5.2 - 19.7

Notes

1.The range in discount rates is due to the durations of different post-employment benefit plans and to the different levels of interest rates used in the same geographical area, notably Europe and Asia.

1. The range of expected returns on plan assets is due to the composition of current plan assets.

2. The average remaining working life of employees is calculated taking into account turnover assumptions

B5. Analysis of the sensitivity of post-employment benefits to changes in the main actuarial assumptions

Measured element percentage	Pension plans	Post-employmenthealthcare plans	Other plans
Change of +1% in the discount rate
Impact on the present value of commitments at December 31	– 11%	– 15%	– 3%
Impact on total net expenses of the plan	– 6%	– 8%	– 37%
Change of +1% in the expected return on plan assets
Impact on plan assets at December 31	1%	1%	1%
Impact on total net expenses of the plan	– 11%	NA	0%
Change of +1% in Future salary increases
Impact on the present value of commitments at December 31	6%	NA	2%
Impact on total net expenses of the plan	14%	NA	39%
Change of +1% in Healthcare cost increase rate
Impact on the present value of commitments at December 31		13%
Impact on total net expenses of the plan		16%

2004 Consolidated financial statements under IFRS

Note IAS 5 - Share-based payments

(In millions of euros at December 31)

1. Expenses recorded in the income statement

		2004
In millions of euros	Cash-settledplans	Equitysettledplans	Totalplans
Net charge from stock purchase plans		7.3	7.3
Net charge from stock options plans	– 7.0	35.4	28.4

The above charges relate to stock-option plans booked under shareholders' equity as of November 7, 2002.

2. Main characteristics of Société Générale stock-option plans

2.1 Equity-settled stock-options plans for Group employees for the year-ended December 31, 2004 are briefly described below:

Issuer	Société Générale	Société Générale	Société Générale
Grant year	2002	2003	2004
Type of plan	stock option	stock option	stock option
Shareholders agreement	05/13/97	04/23/02	04/23/02
Board of Directors decision	01/16/02	04/22/03	01/14/04
Number of stock-options granted	3,543,977	3,891,579	3,788,300
Life time of the options granted	7 years	7 years	7 years
Settlement	Société Générale shares	Société Générale shares	Société Générale shares
Vesting period	01/16/02 - 01/16/05	04/22/03 - 04/22/06	01/14/04 - 01/14/07
Performance conditions	no	no	no
Dismissal outside the Group	expired	expired	expired
Redundancy	expired	expired	expired
Retirement	maintain	maintain	maintain
Death	maintain during 6 months	maintain during 6 months	maintain during 6 months
Share price at grant date (in EUR)	62.50	52.00	70.10
Grant price (in EUR)	62.50	52.00	70.00
(average of 20 previous market prices)
Non granted options	0	0	0
Exercised options	180	0	0
Forfeited options	273,127	80,396	20,000
Outstanding options at December 31, 2004	3,270,670	3,811,183	3,768,300
Number of shares reserved at December 31, 2004	3,270,670	3,811,183	3,768,300
Share price of shares reserved	64.11	52	51.17
Total value of shares reserved (in EUR million)	210	198	193
First authorized date for selling the shares	01/16/06	04/22/07	01/14/08
Delay for selling after vesting period	1 year	1 year	1 year
Fair value (% of the share price at grant date)	28%	25%	21%
Valuation method used to determine the fair value	binomial model	binomial model	binomial model

2.2. Statistics on Société Générale stock-option plans

Main figures for Société Générale stock-option plans for Group employees for the year ended December 31, 2004

	Optionsgrantedin 2002	Optionsgrantedin 2003	Optionsgrantedin 2004	Weightedaverageremainingcontractuallife time	Weightedaveragefair valueat grantdate	Weightedaverageshare priceat exercisedate	Rangeof exerciseprices
Outstanding options at 1/1/2004	3,341,558	3,882,735	0
Options granted during the year	0	0	3,788,300
Options forfeited during the year	70,708	71,552	20,000
Options exercised during the year	180	0	0	61 months		74.55	62.5
Options expired during the year	0	0	0
Outstanding options at 12/31/2004	3,270,670	3,811,183	3,768,300	0	15.05
Exercisable options at 12/31/2004	0	1,500	0	0

Notes

1. The binomial model provides a more detailed simulation of the expected exercise of options by their holders and the performance conditions. It incorporates assumptions based on the observation of the behavior of holders and the realization of performance conditions.

2. The main assumptions used to value the Société Générale stock-option plans are as follows:

	2002	2003	2004
Risk-free interest rate	4.8%	3.5%	3.8%
Implicit share volatility	28%	34%	25%
Forfeited right rate	0%	0%	0%
Expected dividend (payout)	4.0%	4.7%	4.0%
Expected exercise period	5 years	5 years	5 years

The implicit volatility used is the implicit volatility of Société Générale

5-year share options traded OTC.

The dividend payout ratio indicated above is the average of estimated annual dividends.

3. Other stock-option plans - TCW Company

3.1 Main characteristics of stock-option plans attributed to employees of TCW Group in the period ending December 31, 2004

Issuer	TCW	TCW	TCW
Grant year	2001	2002	2003
Type of plan	Stock option	Stock option	Stock option
Shareholders' agreement	07/07/01	07/07/01	07/07/01
Board of Directors decision	07/07/01	01/01/02-07/16/02	02/19/03-03/31/03-06/27/03
Number of stock options granted	1,343	1,418	1,269
Life time of the options granted	10 years	10 years	10 years
Settlement	Société Générale shares	Société Générale shares	Société Générale shares
Vesting period	07/07/2001 - 07/07/2003	01/01/2003 - 07/15/2008	02/18/2005 - 06/26/2009
Performance conditions	no	no	no
Dismissal	no	no	no
Redundancy	expired	expired	expired
Retirement	expired	expired	expired
Death		Partial maintain with accelerated vesting
Share price at grant date	22,225.01	18,138.39	15,503.90
Discount	3,292.48	2,686.94	2,296.56
Exercise price (in euros)	18,932.53	15,451.45	13,207.34
Non granted options
Exercised options	0	0	0
Forfeited options	0	0	224
Outstanding options at 12/31/2004	1,343	1,418	1,045
Number of shares reserved on December 31, 2004
Share price of shares reserved	0.00	0.00
Total value of shares reserved (in EUR million)
First date authorized for selling the shares	08/07/03	02/01/03	03/18/05
Delay for selling after vesting period	none	none	none
Fair value (% of the share price at grant date)	42%	56%	51%
Valuation method used to determine the fair value	black & scholes	black & scholes	black & scholes

3.2 Statistics on TCW stock-option plans

Stock options plans granted to TCW employees during the period ending December 31, 2004 have the following characteristics:

	Optionsgrantedin 2002	Optionsgrantedin 2003	Optionsgrantedin 2004	Weightedaverageremainingcontractuallife time	Weightedaveragefair valueat grant date	Weightedaverageshare priceat exercisedate	Rangeofexerciseprices
Outstanding options at 1/1/2004	1,343	1,418	1,045
Options granted during the period	0	0	0
Options forfeited during the period	0	0	0
Options exercised during the period	0	0	0			NA	NA
Options expired during the period	0	0	0
Outstanding options at 12/31/2004	1,343	1,418	1,045	60 months	6,145
Exercisable options at 12/31/2004	1,254	328	0

Notes

1. The main assumptions used to value the TCW stock-option plans are as follows:

Risk free interest rate	4%
Implicit share volatility	39%
Forfeited right rate	0%
Expected dividend payout	0%
Expected exercise rate	0%

1. The forecast volatility has been estimated using the historical volatility of US listed

companies belonging to the same segment and various maturities. The fair value reflects the future performances of the Company.

4. Information on other plans

4.1 Attribution of Société Générale shares at a discount

In 2004, Société Générale granted 5,522,573 shares with a maximum discount of 20% to employees of the Group, as part of its employee shareholding policy. (NB: In certain countries, notably the US, this discount is less than 20%).

The Group recorded a EUR 7.3 million charge for these shares, taking into account the qualified 5-year holding period. In accordance with the communiqué of the National Accounting Council dated December 21, 2004, the cost of the qualified holding period is taken to be the cost of a strategy consisting in the forward sale of the subscribed shares and the spot purchase of an equivalent number of Société Générale shares in the market, funded using a loan.

4.2 Stock-options plans granted by unlisted companies

A number of Group companies have granted stock options to employees and chief executive officers.These plans are cash-settled. The life time of the options granted is generally 6 years and the last option will be exercised in 2008 at the latest.

When the shares are sold, they are generally bought by an other subsidiary of the Group, in accordance with the general equity-control policy of the Société Générale Group.

The total booked liability for these plans is EUR 14.5 million. The related impact on the 2004 income statement of the settlement of these options is a net income of EUR 7 million, resulting from a difference between the exercise price and the value of the shares to be delivered amounting to EUR 14.5 million.

4.3 Boursorama stock-options plan

In June 2004, Boursorama implemented a stock-option plan for its employees which will be settled in Boursorama shares. 1,419,354 options have been granted, with a 10 year life time. The vesting period is 3 years, followed by a qualified 1 year holding period. The total cost of the plan has been estimated at EUR 3.5 million and a related EUR 582,00 expense was recorded for the year 2004. This cost was calculated using Black & Scholes model.

5. Amendment of existing plans: no plans were modified during 2004.

Special purpose audit report of the Statutory Auditors on the IFRS restated consolidated financial statements for the year ended December 31, 2004

This is a free translation into English of the original Statutory Auditors' report on the restated consolidated financial statements signed and issued in French language and is provided solely for the convenience of English speaking readers.

To the shareholders of Société Générale

At your request and in our capacity as Statutory Auditors of Société Générale SA, we have audited the accompanying consolidated financial statements for the year ended December 31, 2004, which were restated (the "restated consolidated financial statements") in accordance with International Financial Reporting Standards ("IFRS"), as adopted in the European Union.

These restated consolidated financial statements are the responsibility of the Board of Directors. They have been prepared as part of the company's conversion to IFRS as adopted by the European Union in respect of the preparation of the 2005 consolidated financial statements. These restated consolidated financial statements are based on the consolidated financial statements ("the consolidated financial statements") for the year ended December 31, 2004 prepared in accordance with the accounting rules and principles applicable in France which we have audited in accordance with French professional standards. Based on our audit, we issued an unqualified opinion on such consolidated financial statements. Our responsibility is to express an opinion on these restated consolidated financial statements, based on our audit.

We conducted our audit in accordance with the professional standards applicable in France. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the restated consolidated financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the restated consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management for the preparation of the restated consolidated financial statements, as well as evaluating the overall presentation of the restated consolidated financial statements. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the restated consolidated financial statements have been prepared, in all material respects, in accordance with the basis set out in the notes, which describe how IFRS 1 and the other International Financial and Reporting Standards as adopted in the European Union, have been applied, including the assumptions management has made about the standards and interpretations expected to be effective, and the policies expected to be adopted for the preparation of the first complete set of consolidated financial statements in accordance with IFRS as adopted in the European Union.

Without qualifying our opinion, we draw your attention on Note 1 "First time adoption of IFRS", which explains that the restated consolidated financial statements have been prepared on the basis of existing standards and interpretations as at January 1, 2005, and why there is a possibility that the accompanying restated consolidated financial statements may require adjustment before their inclusion as comparative information in the consolidated financial statements for the year ended December 31, 2005, when the Company prepares its first set of consolidated financial statements in accordance with IFRS as adopted in the European Union.

Moreover, because the restated consolidated financial statements for the year ended December 31, 2004 have been prepared as part of the company's conversion to IFRS as adopted by the European Union in respect of the preparation of the 2005 consolidated financial statements, they do not include comparative information relating to 2003, nor all the explanatory notes required by IFRS as adopted in the European Union, which would be necessary to provide, in accordance with these standards, a fair view of the assets, liabilities, financial position and results of the consolidated group of companies.

Neuilly-sur-Seine and Courbevoie, March 10, 2005.

DELOITTE & ASSOCIES ERNST & YOUNG Audit

The Statutory Auditors

José-Luis Garcia Christian Mouillon

Legal Information 2004

Reports and resolutionssubmitted to the General Meeting	274
Report of the Board of Directors
on the resolutions submitted to the General Meeting	274
Resolutions	277
Reports of the Statutory Auditors	282
Corporate Governance	284
By-laws	284
Board's internal rules	291
Director's charter	295
Sustainable development	297
Sustainable development cross-reference index	297
2004 NRE appendix	298
Independant verification statement on the information
relating to Corporate Social Responsability (CSR)	303
Additional information	304
General information	304
Business of Société Générale	307
Person responsible for the reference document
and persons responsible for the audit of the financial statements	308
Report of the Statutory Auditors on the reference document	309
Reference document Cross-reference index	311

Reports and resolutions submitted to the General Meeting

Report of the Board of Directors on the resolutions submitted to the General Meeting

We have called this General Meeting today to submit thirteen resolutions for your approval. The purpose of the resolutions is detailed and commented upon below.

Report of the Board of Directors on the resolutions to be considered by the Meeting as an Ordinary Meeting

I - Approval of the 2004 financial statements, dividend payment and related party agreements

The first and second resolutions concern the approval of the parent company financial statements for 2004 and the allocation of income. Detailed comments on the parent company financial statements are included in the annual report.

The dividend per share is set at EUR 3.30, with a tax credit equal to 50% of the dividend for French residents eligible for tax. The share will be traded ex-dividend as of May 30, 2005 and the dividend will be payable in cash as of that date.

The second resolution is designed to comply with the tax requirement set out in the amended Financial Law for 2004 whereby a maximum of EUR 200 million must be transferred from the special reserve for long-term capital gains to other reserves by December 31, 2005 at the latest. The amount transferred from the special reserve for longterm capital gains shall not be liable for capital gains tax, but shall be subject to an exceptional tax of 2.5%.

The third resolution seeks your approval of the consolidated financial statements. Comments on the consolidated financial statements are also included in the annual report.

The fourth resolution concerns related party agreements covered by article L. 225-38 of the French Commercial Code. The report of the Statutory Auditors notes that no new related party agreements were concluded in the 2004 fiscal year.

II - Board of Directors – renewal of Directors' mandates The fifth, sixth and seventh resolutions propose the renewal of the mandates of Mr Jean Azéma, Mrs Elisabeth Lulin and Mr Patrick Ricard for a term of four years.

Mr Jean Azéma, Chief Executive Officer of Groupama, has been an independent director since 2003.

Mrs Elisabeth Lulin, founder and CEO of Paradigmes et Caetera, has been an independent director since 2003. She has also been a member of the Audit Committee since April 20, 2004.

Mr Patrick Ricard, Chairman and Chief Executive Officer of Pernod Ricard, has been an independent director since 1994. He is also a member of the Nomination and Compensation Committees.

Subsequent to these appointments, the Board of Directors shall comprise sixteen members, including three employees and eight independent directors.

III - Authorization to buy back Société Générale shares

The eighth resolution concerns the renewal of the authorization for the Company to buy back its own shares which was granted to the Board of Directors at the General Meeting of April 29, 2004.

This resolution proposes that the Company be authorized to purchase its own shares up to a legal limit of 10% of its issued capital stock at the time of purchase and specifies that the number of shares held subsequent to this purchase may not exceed 10% of the Company's capital stock. This authorization is valid for a period of eighteen months.

It is submitted for approval for the same reasons as those given in the past, subject to the new regulatory restrictions.

These share purchases may be used to implement or honor stock option plans, attribute bonus shares to employees and representatives of the Group and honor commitments arising from the exercise of convertible debt securities. They may also be held and used subsequently in exchange or payment for acquisitions, or for the liquidity agreement implemented in 2004.

Under the seventeenth resolution approved by the General Meeting in 2004, share purchases may also be carried out in order to cancel shares and thereby improve the return on equity and earnings per share.

The shares may be bought, sold or transferred by any means and at any time, or, if the Board of Directors so decides, during set periods, including in the event of public offers, and on one or more occasions, in compliance with the limits and methods specified by the Autorité des Marchés Financiers (French Securities Regulator). The shares may be bought, sold or otherwise transferred over-the-counter, in blocks, or in the form of options or derivatives.

The maximum buying price is set at EUR 113, i.e. around 2.5 times the net assets per share, and the minimum selling price is set at EUR 46, approximately equal to the net assets per share as at December 31, 2004.

An information notice duly registered with the Autorité des Marchés Financiers was drawn up prior to this General Meeting.

In accordance with the legal requirements in force, previous share buyback programmes that have been carried out are detailed hereunder.

In 2004, excluding transactions carried out as part of the liquidity agreement, 13,080,945 shares were bought back in 2004 at an average price of EUR 68.49 and 2,706,017 shares were sold at an average price of EUR 71.78 under your previous authorizations.

In addition, 1,116,161 million shares were sold following the exercise of stock options, at an average strike price of EUR 48.67.

These transactions were carried with a view to actively managing shareholders' equity, for the acquisition of 6.4% of TCW's capital, for the attribution of vesting stock and for regulating the company share price. Total trading costs including taxes amounted to EUR 1,296,698.20.

On November 9, 2004, Société Générale signed a liquidity contract with SG Securities for EUR 75 million (EUR 25 million effectively used). Under this contract, 879,670 shares were bought back at an average price of EUR 73.83 and 866,242 shares were sold at an average price of EUR 73.88.

At December 31, 2004 the Company held 30,350,903 of its own shares (6.82% of capital), with a nominal value of EUR 1.25 per share, valued at cost at EUR 1,830,928,298.

In light of shares purchased since the close of the financial year and the cancellation of 11,000,000 shares by decision of the Board of Directors on February 9, 2005, the Company held 19,074,505 shares at February 9, 2005.

Report of the Board of Directors on the resolutions to be considered by the Meeting as an Extraordinary Meeting

IV - Amendments to the Company's by-laws

Reduction in the number of directors

The ninth resolution proposes reducing the maximum number of members of the Board of Directors from eighteen to fifteen, to bring it in line with the average for CAC 40 companies which is fourteen members.

Therefore, in accordance with the by-laws, the maximum number of directors appointed by the General Meeting would be thirteen (compared with the current fifteen) and the number of directors elected by personnel would be two (compared with the current three).

With regard to staff-appointed directors, the method of election shall remain unchanged for the election in 2006 of a representative for executives and a representative for other personnel. However, the use of electronic voting may be admitted, subject to prior consultation with staff representative bodies. The method for appointing directors to represent personnel shall be reviewed once the legal framework for staff representation has been clarified and if the number of employee shareholders based at the Group's foreign subsidiaries increases to a more significant level.

Increase in the first threshold above which shareholdings must be declared

The tenth resolution proposes that you increase the first statutory threshold above which Société Générale shareholders are required to declare their holdings from 0.5% of capital or voting rights to 1.5%. Beyond this initial 1.5%, shareholders shall still be required to notify the Company whenever their holding of capital or voting rights increases or decreases by a further 0.5%.

This measure reduces declaration requirements for shareholders, while providing the Company with a clause that is more suited to its shareholder structure.

V - Authorization to grant existing shares

The eleventh resolution proposes that you grant the Board of Directors the power to attribute existing Société Générale shares under the terms of article L. 225-197-1 et seq. of the French Commercial Code, to employees and company representatives of Société Générale or of companies or economic interest groupings directly or indirectly related to it.

This new legal and tax mechanism, introduced by the French Budget Law for 2005, is similar to the system of restricted shares or performance shares used by issuers in the United Kingdom and the United States.

The system allows companies to attribute shares to employees free of charge, but subject to certain conditions, under favorable tax and social terms for both the company and the beneficiary. The Board of Directors' decision to attribute these shares opens a minimum period of two years, at the end of which, if the conditions set by the Board are met, the beneficiary becomes a shareholder. At the end of this period, the shareholder is required to hold the allotted shares for a minimum of two years.

This restricted share system is a useful complement to the existing compensation and loyalty mechanisms as it offers particularly favorable fiscal and social terms both for the company and the beneficiary. It also has a less dilutive impact on shareholder returns than stock options, at an equivalent cost for the company under the new IFRS 2 accounting standard. The duration of the scheme and conditions of attribution increase the loyalty of the beneficiaries and tie their interests in more closely with those of the shareholders.

It is proposed to set a maximum limit of 1% of capital stock for the total number of restricted shares that can be attributed under this scheme, and to grant the authorization for a period of fourteen months. The Board of Directors shall report to the 2006 General Meeting on its use of this authorization.

At this stage, the Board plans to use the authorization in a targeted and diversified manner in order to reward different categories of executives and the Chief Executive officers, in addition to or instead of their usual performance-linked pay. It also plans to request that the 2006 General Meeting grant it the authorization to carry out a capital increase reserved for employees, implement a program of share subscription or share purchase options and attribute restricted shares up to a maximum annual volume of 3% of capital stock, except under specific conditions, rather than the current 4.75%.

VI - Authorization to increase capital stock up to a limit of 10% in remuneration for share contributions

The twelfth resolution proposes that the General Meeting authorize the Board, under the new reforms introduced by the 2004 "Ordonnance" reforming securities law, to carry out a capital increase up to a limit of 10% of capital stock, in order to pay for contributions of shares or securities with an equity component that are not part of a public exchange offering.

This authorization would not affect the overall limit on the amount of the capital increases without preemptive subscription rights that the Board can carry out, as it falls under the nominal limit authorized by the General Meeting in 2004.

VII - Delegation of authority

The thirteenth resolution is a standard resolution that grants general powers to the Board to carry out all necessary formalities.

Resolutions submitted to the General Meeting

For consideration by the Meeting as an Ordinary Meeting

First resolution

Approval of the parent company financial statements

The General Meeting, under the conditions required for Ordinary Meetings as to quorum and majority, having been informed of the Board of Directors' and Statutory Auditors' reports, approves the parent company financial statements at December 31, 2004, as well as the transactions reflected in these statements and described in the reports.

The General Meeting approves net income after taxes of EUR 2,303,226,958.31 for the 2004 financial year.

Second resolution

Allocation of income and dividend payment Reallocation of income booked to the "special reserve for long-term capital gains"

The General Meeting, under the conditions required for Ordinary Meetings as to quorum and majority, having been informed of the Board of Directors' report, resolves to allocate EUR 839,801.24 of net income after taxes for 2004 of EUR 2,303,226,958.31 to the legal reserve.

The General Meeting resolves to appropriate the remaining net income of EUR 2,302,387,157.07, together with the retained earnings from the previous year of EUR 3,803,901,724.00, representing a total amount of EUR 6,106,288,881.07 available for distribution, as follows:

• allocation of EUR 833,381,732.37 to retained earnings;

• allocation to common shares of total dividends of EUR 1,469,005,424.70. The dividend per share with a nominal value of EUR 1.25 is EUR 3.30.

Shares will be traded ex-dividend as of May 30, 2005 and dividends will be payable from this date. Taxpayers may be entitled to deduct 50% of the dividend from their taxable income, under Article 158-3 of the French Tax Code

Following these appropriations:

• reserves are increased from a total of EUR 9,761,180,538.34 following the allocation of earnings in 2003 to EUR 10,111,265,559.65 in view of the additional paid-in capital on capital increases and capital gains from mergers during 2004;

• retained earnings stand at EUR 4,637,283,456.37, compared with EUR 3,803,901,724.00 after the allocation made in 2003. Retained earnings may be increased by the dividends on any Société Générale shares held by the Company as treasury stock at the time of the dividend payment for the 2004 financial year.

The General Meeting notes, in accordance with the law, that the dividend paid on each share for the three preceding fiscal years was as follows:

	2001	2002	2003
Net dividend,
in euros (1)	2.10	2.10	2.50

(1) Certain shareholders liable for tax were entitled to a tax credit equal to 50% of the amount of the dividend.

The General Meeting also resolves, in accordance with Article 39-IV of the amended Financial Law for 2004, to transfer a total of EUR 200,000,000 from the special reserve for long-term capital gains mentioned in Article 209 quarter 1 of the French Tax Code to other reserves.

This sum shall be deducted from the special reserve for capital gains which is subject to the following rates of tax:

• 10% for the first EUR 7,710,576.23;
• 15% for the next EUR 155,842,337.22;
• 18% for the remaining EUR 36,447,086.55.

The transferred amount, minus a tax allowance of EUR 500,000, is subject to an exceptional tax of 2.5%. Half of this tax charge will be deducted from other reserves on March 15, 2006, and half on March 15, 2007.

Third resolution

Approval of the consolidated financial statements

The General Meeting, under the conditions required for Ordinary Meetings as to quorum and majority, having been informed of the Board of Directors' and Statutory Auditors' reports, approves the consolidated financial statements at December 31, 2004.

Fourth resolution

Approval of the report on agreements covered by article L. 225-38 of the French Commercial Code

The General Meeting, under the conditions required for Ordinary Meetings as to quorum and majority, having been informed of the Statutory Auditors' report on the agreements covered in article L. 225-38 of the French Commercial Code, approves said report and duly notes that there are no party agreements to be submitted for ratification.

Fifth resolution

Renewal of the Director's mandate of Mr Jean Azéma

The General Meeting, under the conditions required for Ordinary Meetings as to quorum and majority, having been informed of the Board of Directors' report, renews the Director's mandate of Mr Jean Azéma.

This mandate is granted for a period of four years and will expire following the General Meeting to be held in 2009 to approve the financial statements for the preceding fiscal year.

Sixth resolution Renewal of the Director's mandate of Mrs Elisabeth Lulin

The General Meeting, under the conditions required for Ordinary Meetings as to quorum and majority, and having been informed of the Board of Directors' report, renews the Director's mandate of Mrs Elisabeth Lulin.

This mandate is granted for a period of four years and will expire following the General Meeting to be held in 2009 to approve the financial statements for the preceding fiscal year.

Seventh resolution

Renewal of the Director's mandate of Mr Patrick Ricard

The General Meeting, under the conditions required for Ordinary Meetings as to quorum and majority, and having been informed of the Board of Directors' report, renews the Director's mandate of Mr Patrick Ricard.

This mandate is granted for a period of four years and will expire following the General Meeting to be held in 2009 to approve the financial statements for the preceding fiscal year.

Eighth resolution

Authorization to buy and sell Société Générale shares

The General Meeting, under the conditions required for Ordinary Meetings as to quorum and majority, having been informed of the Board of Directors' report and the information notice approved by the Autorité des Marchés Financiers, and in accordance with articles L. 225-209 et seq. of the French Commercial Code and European Commission Regulation No. 2273/2003 of December 22, 2003:

1. authorizes the Board of Directors to purchase own shares up to a maximum of 10% of the Company's issued capital stock at the time of the transaction. The total number of shares held by the Company following these purchases may not exceed 10% of the capital stock;

2. decides that the Board of Directors may purchase shares at its own discretion for the following purposes:

• canceling shares in accordance with the authorization granted by the General Meeting of April 29, 2004 under the seventeenth resolution;

• granting or honoring stock options or otherwise allocating shares to employees and representatives of the Group, and notably: – offering employees of the Company or affiliated companies under articles L. 225-180 and L. 233-16 of the French Commercial Code, the possibility to purchase shares, either directly or through a company investment fund, under the conditions stipulated by law, in particular articles L. 443-1 et seq. of the French Labor Code;

– granting stock options to employees or Chief Executive officers of the Company or affiliated companies under articles L. 225-180 and L. 225-197-2 of the French Commercial Code.

• granting convertible debt securities or honoring financial exposure with respect to these securities, notably the obligation to allot shares on the exercise of securities with an immediate or deferred equity component;

• holding and subsequently using the shares in exchange or as payment for acquisitions;

• granting a mandate to an investment services provider for the purchase or sale of Company shares as part of a liquidity contract that meets the terms of the compliance charter recognized by the Autorité des Marchés Financiers.

1. resolves that the buying, selling or transfer of these shares may be carried out by any means and at any time, or, if the Board of Directors so decides, during set periods, including in the event of public offers, and on one or more occasions, in compliance with the limits and methods specified by the Autorité des Marchés Financiers. The shares may be bought, sold or otherwise transferred over-thecounter, in blocks, or in the form of options or derivatives;

2. sets the maximum buying price at EUR 113 per share and the minimum selling price at EUR 46 per share. These shares may be allocated as restricted shares, under the conditions provided for in articles L. 443-1 et seq. of the French Labor Code and articles L 225-197-1 et seq. of the French Commercial Code;

On the basis of the capital stock at February 9, 2005, and without taking into account shares already held by the Company, a maximum theoretical total of 43,415,315 shares could be bought, for a maximum theoretical amount of EUR 4,905,930,595.

1. grants the Board of Directors full powers, with the option of delegating these powers, to carry out the aforementioned transactions, complete all acts and formalities, make the required adjustments following transactions on capital stock and, more generally, to take all necessary measures for the application of this authorization;

2. resolves that this authorization is valid for a period of eighteen months from the date of this General Meeting and replaces that granted by the Joint Shareholders' Meeting of April 29, 2004 in its tenth resolution, for the remaining term of the same.

For consideration by the Meeting as an Extraordinary Meeting

Ninth resolution Amendments to the Company's by-laws – reduction in the number of directors

The General Meeting, under the conditions required for Extraordinary Meetings as to quorum and majority, having been informed of Board of Directors' report:

1. decides to reduce the maximum number of directors appointed by the Ordinary Meeting from fifteen to thirteen and the number appointed by salaried employees from three to two. The use of electronic voting shall be permitted for the election of staff-appointed directors;

2. resolves, in consequence, to amend article 7 of the by-laws as indicated below, to take effect at the end of the present General Meeting for directors appointed by the General Meeting and, for directors elected by personnel, when these directors are replaced following the expiry of their mandates in 2006.

Article 7

I - Directors

Société Générale is managed by a Board of Directors made up of two categories of directors:

1. Directors appointed by the Shareholders' Ordinary General Meeting.

"There are at least nine of these Directors, and thirteen at the most."

(The rest of I-1 remains unchanged)

1. Directors elected by personnel

The following is added to the second paragraph:

"When the mandates of the current Directors expire in 2006, the number of staff-elected Directors shall be reduced to two, that is one to represent the executives and one to represent all other Company personnel." (The rest of I-2 remains unchanged)

Reports and resolutions submitted to the General Meeting

II - Methods of electing Directors elected by personnel In the fourth paragraph, the word "three" is replaced by "the statutory number".

The following sentence is added to the last paragraph: These methods may include electronic voting. In the event of the use of electronic voting, the specifications for the practical organization of the election described herein may be waived as necessary.

1. grants the Board full powers to delete those elements of article 7-I-2 of the by-laws that are no longer relevant in 2006.

Tenth resolution

Amendment to the Company's by-laws: increase in the first statutory disclosure threshold for shareholdings

The General Meeting, under the conditions required for Extraordinary Meetings as to quorum and majority, having been informed of the report of the Board of Directors:

1. resolves to increase the first threshold above which Société Générale shareholders are obliged to disclose their holdings to the Company from 0.5% to 1.5%;

2. as a result, amends article 6 of the by-laws as follows:

The second paragraph is replaced with the following: "Any shareholder acting on his own or jointly, who comes to hold, directly or indirectly, at least 1.5% of the capital or voting rights, must inform the Company within fifteen days of the time at which he exceeds this threshold, and must also indicate in his declaration the number of securities he holds which may give rise to his holding capital stock in the future. Mutual fund management companies must provide this

information based on the total number of shares held in the Company by the funds they manage. Beyond the initial 1.5%, shareholders are obliged to notify the Company, under the aforementioned conditions, whenever their holding of capital or voting rights exceeds an additional 0.5%."

Eleventh resolution Authorization granted to the Board of Directors to grant existing shares

The General Meeting, under the conditions required for Extraordinary Meetings as to quorum and majority, having been informed of the report of the Board of Directors' and the special report of the Statutory Auditors, and in accordance with articles L. 225-197-1 et seq. of the French Commercial Code:

1. authorizes the Board of Directors to grant existing shares as restricted shares, on one or more occasions, to executives or other similar employees, or to certain categories of employees and to the Chief Executive Officers mentioned in article L. 225-197-1 of the French Commercial Code of Société Générale or companies and economic interest groupings that are directly or indirectly related to it under the terms of article L. 225-197-2 of the French Commercial Code;

2. decides that the Board of Directors shall be entitled to choose the beneficiaries of these shares and shall set the terms and conditions for their attribution;

3. stipulates that the total number of restricted shares thus attributed may not represent more than 1% of Société Générale's capital stock at this date;

4. resolves that the attribution of these shares to the beneficiaries shall be definitive at the end of a minimum vesting period of two years, and that beneficiaries must hold these shares for a minimum of two years. The Board of Director retains the right to increase the vesting and holding periods, up to a maximum of four years;

5. authorizes the Board of Directors to adjust the number of restricted shares attributed to beneficiaries in the event of financial transactions on Société Générale's capital stock;

6. resolves that this authorization is valid for a period of fourteen months as of the date of the present General Meeting.

The General Meeting grants full powers to the Board of Directors, with the option of delegating these powers in accordance with the law, to use this authorization, carry out all formalities and make any necessary declarations and, more generally, to take all necessary measures for the application of this authorization.

Twelfth resolution

Authorization to increase capital stock up to a maximum of 10%, in remuneration for contributions of capital stock or securities with an equity component that are not part of a public exchange offer

The General Meeting, under the conditions required for Extraordinary Meetings as to quorum and majority, having been informed of the Board of Directors' report, and in accordance with article L. 225-147 of the French Commercial Code:

1. authorizes the Board of Directors to carry out a capital increase without preemptive subscription rights, on one or more occasions and on the basis of the report of the contribution auditor, in order to remunerate contributions of capital stock or securities with an equity component which do not fall under the terms of article L. 225-148;

2. sets the maximum total increase in nominal capital which may result from the issuance of these securities at 10%, subject to the nominal limit of EUR 300 million for capital increases without preemptive subscription rights authorized by the General Meeting of April 29, 2004 in its twelfth resolution;

3. resolves that this authorization is valid for a period of fourteen months as of the date of the present General Meeting.

The General Meeting grants the Board of Directors full powers to approve the valuation of contributions, to decide on and implement the capital increase to remunerate these contributions, to book to additional paid-in capital all fees and charges arising from the capital increase, to deduct from additional paid-in capital the sums necessary to bring the legal reserve up to its required level, to make all necessary amendments to the Company by-laws and, more generally, to take all necessary measures relating to the transaction.

Thirteenth resolution Delegation of authority

Full powers are granted to holders of a copy or extract of the minutes of this Meeting to carry out all formalities and make all publications related to the resolutions above.

Special report of the Statutory Auditors on certain related party transactions

Year ended December 31, 2004

(Free translation of the French original)

To the Shareholders of Société Générale,

In our capacity as Statutory Auditors of your Company, we are required to report on certain contractual agreements with certain related parties of which we have been advised. We are not required to ascertain whether such agreements exist. We hereby inform you that we have not been advised of any agreements covered by article L. 225-38 of French Company Law (Code de commerce).

Neuilly-sur-Seine and Courbevoie, March 10, 2005

DELOITTE & ASSOCIES ERNST & YOUNG Audit

The Statutory Auditors

José-Luis Garcia Christian Mouillon

Special report of the Statutory Auditors on the allocation of existing shares as restricted shares to employees and chief executive officers

(Free translation of the French original)

Extraordinary General Meeting of May 9, 2005

To the Shareholders of Société Générale,

In our capacity as statutory auditors of your Company, and in compliance with article L. 225-197-1 of French Commercial Code, we hereby report on the proposed allocation of existing shares as restricted shares to executives or other similar employees, or to certain categories of employees and to the company representatives mentioned in article L. 225-197-1 of the French Commercial Code of Société Générale or companies and economic interest groupings that are directly or indirectly related to it under the terms of article L. 225-197-2 of the French Commercial Code, upon which you are called to vote under Resolution 11.

Your Board of Directors proposes that it shall be entitled to choose the beneficiaries of these shares and shall set the terms and conditions for their attribution. Your Board of Directors will have to issue a report concerning the terms and conditions of the operation. Our responsibility is to express our comments, if any, on the proposed operation.

Without any French professional standard applicable to this operation, which is due to a law dated December 30, 2004, we carried out the necessary procedures to verify the compliance of the proposed operation with French law.

We have nothing to report on the information included in the Board of Directors' supplementary report on the proposed operation of allocation of existing restricted shares.

Neuilly-sur-Seine and Courbevoie, March 10, 2005

DELOITTE & ASSOCIES ERNST & YOUNG Audit

The Statutory Auditors

José-Luis Garcia Christian Mouillon

Corporate Governance

By-laws

(if approved by the Extraordinary General Meeting of May 2005)

Type of company - Name-Registered office - Purpose

Article 1

The Company, named Société Générale, is a joint-stock company incorporated by deed approved by the Decree of May 4, 1864, and is approved as a bank.

The duration of Société Générale, previously fixed at 50 years with effect from January 1, 1899, was then extended by 99 years with effect from January 1, 1949.

Under the legislative and regulatory provisions relating to credit institutions, notably the articles of the Monetary and Financial Code that apply to them, the Company is subject to the commercial laws, in particular articles L. 210-1 and following of the French Commercial Code, as well as by the current by-laws.

Article 2

Société Générale' s registered office is at 29, boulevard Haussmann, Paris (9e).

In accordance with current legal and statutory provisions it may be transferred to any other location.

Article 3

The purpose of Société Générale is, under the conditions determined by the laws and regulations applicable to credit institutions, to carry out with individuals or corporate entities, in France or abroad:

• all banking transactions;

• all transactions related to banking operations, including in particular investment related services or allied services as listed by articles L. 321-1 and L. 321-2 of the Monetary and Financial Code;

• all acquisitions of interests in other companies.

Société Générale may also on a regular basis, as defined in the conditions set by the French Banking Regulation Committee, engage in all transactions other than those mentioned above, including in particular insurance brokerage.

Generally, Société Générale may carry out, on its own behalf, on behalf of a third party or jointly, all financial, commercial, industrial or agricultural personalty or realty transactions, directly or indirectly related to the above-mentioned activities or likely to facilitate the accomplishment of such activities.

Capital - Shares

Article 4

The share capital amounts to EUR 542,691,448.75. It is divided into 434,153,159 shares of EUR 1.25 par value each fully paid up.

The capital may be increased, reduced or divided into shares of different par value on decision of the competent meeting or meetings of shareholders.

Article 5

Each share gives right, in the ownership of the Company's assets and in the liquidating surplus, to a percentage equal to that fraction of the registered capital that it represents.

All shares which make up or which will make up the registered capital will be given equal rank as regards taxes. Consequently, all taxes which for whatever reason may become payable on account of capital reimbursement for certain of them only, either during the life of the Company or during its liquidation, shall be divided between all the shares making up the capital during such reimbursement so that, while allowing for the par and non-amortized value of the shares and for their respective rights, all present or future shares shall carry entitlement for their owners to the same effective advantages and to the right to receive the same net sum.

Whenever it is necessary to possess a certain number of shares in order to exercise a right, it is incumbent on shareholders who own fewer shares than the total number required to assemble the necessary number of shares.

Article 6

Shares may, in accordance with the holder's wishes, be registered or bearer shares. Such shares shall be freely negotiable unless otherwise stipulated by law.

Any shareholder acting on his own or jointly, who comes to hold directly or indirectly at least 1.5% of the capital or voting rights, must inform the Company within fifteen days of the time at which he exceeds this threshold, and must also indicate in his declaration the number of securities he holds which may give rise to his holding capital stock in the future. Mutual fund management companies must provide this information based on the total number of shares held in the Company by the funds they manage. Beyond the initial 1.5% shareholders are obliged to notify the Company, under the aforementioned conditions, whenever their holding of capital or voting rights exceeds an additional 0.5% (1).

Failure to comply with this requirement will be penalized in accordance with legal provisions on this matter, at the request of one or more shareholders with at least a 5% holding in the Company's capital or voting rights. The said request will be duly recorded in the minutes of the General Meeting.

Any shareholder acting on his own or jointly, is also required to inform the Company within fifteen days if the percentage of his capital or voting rights falls below each of the thresholds described in paragraph 2 above.

The Company can at any time, in accordance with current statutory and regulatory provisions, request that the organisation responsible for securities clearing provide information relating to the shares giving the right to vote in its General Meetings, either immediately or over the long term, as well as to holders of the said shares.

The rights of shareholders shall comply with applicable statutory and regulatory provisions.

Board of Directors

Article 7

I - Directors

Société Générale is managed by a Board of Directors made up of two categories of Directors:

1. Directors appointed by the Shareholders' Ordinary General Meeting

There are at least nine of these Directors, and thirteen (1) at the most.

The functions of directors appointed by the Ordinary General Meeting shall expire four years after the approval of the current article. This provision does not apply to Directors in office at the time of this approval.

However, the Ordinary General Meeting shall be able to set a term of between two and four years for the mandates of Directors it will appoint on expiry of current mandates of Directors, in order that a sufficient number of mandates of Directors appointed by this meeting will be renewed each year to enable the full renewal of all mandates in four years' time.

When, in application of current legal and statutory provisions, a Director is appointed to replace another, then his term of office shall not exceed that term of office remaining to be served by his predecessor.

2. Directors elected by personnel

The status and methods of electing these Directors are laid down by articles L. 225-27 to L. 225-34 of the French Commercial Code, as well as by these by-laws. When the mandates of the current Directors expire in 2006, the number of staff-elected Directors shall be reduced to two, that is one to represent the executives and one to represent all other Company personnel (1).

In any event, their number may not exceed one-third of the Directors appointed by the General Meeting.

Their term of office is three years.

Regardless of the appointment procedure, the duties of a Director cease at the end of the Ordinary General Meeting called to approve the financial statements of the previous fiscal year and held during the year in which his term of office expires.

(1) Amendments submitted to the General Meeting of May 2005.

Corporate Governance

Directors may be re-elected, as long as they meet the legal provisions, particularly with regard to age.

Each Director must hold at least two hundred shares.

II - Methods of electing Directors elected by personnel

For each seat to be filled, the voting procedure is that set forth by law.

The first Directors elected by the staff will begin their term of office during the Board of Directors' Meeting held after publication of the full results of the first elections.

Subsequent Directors shall take up office on expiration of the outgoing Directors' terms of office.

If, in any circumstances and for any reason whatsoever, there shall remain in office less than the statutory number (1) of Directors before the normal end of the term of office of such Directors, vacant seats shall remain vacant until the end of such term of office and the Board shall continue to meet and take decisions validly until that date.

Elections shall be organized every three years so that a second vote may take place at the latest fifteen days before the normal end of the term of office of out-going Directors.

For both the first and second ballot, the following deadlines should be adhered to:

• posting of the date of the election at least eight weeks before the date of polling;

• posting of the lists of the electors at least six weeks before the date of polling;

• registration of candidates at least five weeks before the date of polling;

• posting of lists of candidates at least four weeks before the date of polling;

• sending of documents required for absentee voting at least three weeks before the date of polling.

The candidatures or lists of candidates other than those entered by a representative trade union should be accompanied by a document including the names and signatures of one hundred employees presenting the candidates.

Polling takes place the same day, in the work place, and during working hours. Nevertheless, the following may enter absentee votes:

• employees not present on the day of polling;
• employees working abroad;

• employees of a department or office, or seconded to a subsidiary in France not having a polling station, or who cannot vote in another office.

Each polling station consists of three elective members, with the Chairman being the oldest one among them. The Chairman is responsible for seeing that voting operations proceed correctly.

Votes are counted in each polling station, and immediately after closing of the polls; the report is drawn up as soon as the counting has been completed.

Results are immediately sent to the Head Office of the Société Générale, where a centralized results station will be set up with a view to drafting the summary report and announcing the results.

Methods of polling not specified by articles L. 225-27 to L. 225-34 of the French Commercial Code or these by-laws, are decreed by the General Management after consulting with representative trade unions.

These methods may include electronic voting. In the event of the use of electronic voting, the specifications for the practical organization of the election described herein may be waived as necessary. (1)

III - Non-voting directors "Censeurs"

On the proposal of the Chairman, the Board of Directors may appoint one or two non-voting Directors "Censeurs".

"Censeurs" are convened and attend Board of Directors' meetings in a consultative capacity.

They are appointed for a period not exceeding four years and the Board can renew their terms of office or put an end to it at any time.

They may be selected from among the shareholders or non-shareholders, and receive an annual remuneration determined by the Board of Directors.

Article 8

The Board of Directors determines the Company's strategy and ensures its implementation. Subject to the powers expressly attributed to the General Meeting and within the scope provided for in the corporate purpose, it considers all matters that affect the Company's operations and settles by its decisions matters which concern it.

It carries out all the controls and verifications it deems appropriate. The Chairman or Chief Executive Officer is required to furnish each Director with all documents required to carry out their function.

Article 9

The Board of Directors elects a Chairman from among its natural person members, determines his remuneration and sets the duration of his term of office, which may not exceed that of his term of office as Director.

No member of 70 years of age or more shall be appointed Chairman. If the Chairman in office reaches the age of 70, his duties shall cease after the next Ordinary General Meeting called to approve the financial statements of the preceding fiscal year.

The Chairman organizes and manages the work of the Board of Directors and reports on its activities to the General Meeting. He ensure the Company's bodies operate correctly and in particular ensures that the Directors are able to fulfil their functions.

Article 10

The Board of Directors meets as often as is required by the interests of the Company, upon convocation by the Chairman, either at the registered office or in any other place indicated in the convocation. The Board examines the questions placed on the agenda.

It will meet when at least one third of Board members or the Chief Executive Officer submits a request for a meeting with a specific agenda to the Chairman.

If the Chairman is unable to attend, the Board of Directors can be convened either by one third of its members, or the Chief Executive Officer or a Chief Executive Officer "délégué" provided they are a member of the Board.

Apart from where specifically provided for, Directors are called to meetings by letter or by any other means. In any event, the Board may always deliberate validly if all its members are present or represented.

Article 11

Board meetings are chaired by the Chairman of the Board of Directors, or in his absence, by a Director designated for this purpose at the beginning of the meeting.

Every Director may give his proxy to another Director, but a Director may act as proxy for only one other Director and a proxy can only be given for one specific meeting of the Board.

In all cases, deliberations of the Board are valid only if at least half the members are present.

The Chief Executive Officer attends meetings of the Board.

One or several delegates of the Central Works Council attend Board meetings, under conditions laid down by the legislation in force.

At the request of the Chairman of the Board of Directors, members of General Management, the Statutory Auditors or other persons from outside the Company with specific expertise with respect to the items on the agenda may attend all or part of a Board meeting.

Resolutions are adopted by a majority vote of the Directors present or represented. In the event of a tie, the Chairman holds a casting vote.

A member of management staff named by the Chairman serves as Secretary of the Board.

Minutes are prepared and copies or extracts certified and delivered in accordance with the law.

Article 12

Members of the Board may receive Director's fees in the form of a global sum set by the General Meeting distributed by the Board among its members as it sees fit.

Corporate Governance

General Management

Article 13

The General Management of the Company is the responsibility of either the Chairman of the Board of Directors, or any other individual appointed by the Board of Directors to acts as Chief Executive Officer.

The Board of Directors may choose between the two general management structures, and its decision is only valid if:

• the agenda with respect to this choice is sent to members at least 15 days before the date of the Board meeting,

• at least two-thirds of Directors are present or represented.

Shareholders and third parties shall be informed of this decision in accordance with the regulations in force.

When the Chairman of the Board of Directors assumes responsibility for the general management of the Company, the provisions relating to the Chief Executive Officer shall be applicable to him.

The Chief Executive Officer shall be granted exhaustive powers to act on behalf of the Company in all matters. He shall exercise these powers within the scope of the Company's purpose and subject to those powers expressly assigned by law to meetings of shareholders and Board of Directors. He shall represent the company vis-à-vis third parties.

The Board of Directors sets the remuneration and the duration of the Chief Executive Officer's term, which may not exceed that of the dissociation of the functions of Chairman and Chief Executive Officer nor, where applicable, the term of his Directorship.

No person aged 70 or more shall be appointed Chief Executive Officer. If the Chief Executive Officer in office reaches 70 years of age, his functions shall end at the end of the next Ordinary General Meeting called to approve the financial statements of the preceding fiscal year.

On recommendation by the Chief Executive Officer, the Board of Directors can appoint up to five persons to assist the Chief Executive Officer, who shall have the title Chief Executive Officer "délégué".

In agreement with the Chief Executive Officer, the Board of Directors determines the extent and duration of the powers granted to Chief Executive Officers "délégués". The Board of Directors sets their remuneration. With respect to third parties, Chief Executive Officers "délégués" have the same powers as the Chief Executive Officer.

Shareholders' meeting

Article 14

The General Meeting is made up of all Société Générale shareholders.

It is called and deliberates as provided by legal provisions in force.

The meeting may be publicly broadcast if decided by the Board of Directors and announced in the notice of meeting and/or convocation.

It meets at the Company's head office or in any other place in mainland France indicated in the convocation notice.

Such meetings are chaired by the Chairman of the Board or, in his absence, by a Director appointed for the purpose by the Chairman of the Board.

Regardless of the number of shares held, every shareholder has the right, upon proof of his identity, to participate in the General Meetings, by personally attending them, by returning his ballot by mail or by a representative, provided:

• in the case of holders of registered shares, that their names are entered in the Company registry;

• in the case of holders of bearer shares, that they have deposited at the place mentioned in the convocation notice, a certificate delivered by a qualified person stating that the shares in their account are unavailable until the date of the Meeting;

• and, where applicable, to provide the Company with proof of their identity, in line with the legal provisions in force.

These formalities must be completed at least two days, or a shorter period if mentioned in the meeting notice, before the meeting is held, unless the regulations in force shorten this period.

The registration and non-transferability of shares may only be revoked in accordance with the regulations in force.

Shareholders may participate in General Meetings by video-conference or any other means of telecommunication authorized by the law, subject to the conditions set by the law and when stipulated in the meeting notice.

As from January 1, 1993, double voting rights, in relation to the share of capital stock they represent are allocated to all those shares which are fully paid up and which have been registered in the name of the same shareholder for two years. Double voting rights are also allocated to new registered shares that may be allocated freely to a shareholder in respect of the shares with double voting rights already held by him, on the occasion of an increase in capital stock by incorporation of reserves, unappropriated retained earnings, net income or additional paid-in capital.

The number of votes at General Meetings to be used by one shareholder, either individually or by a proxy, may not exceed 15% of total voting rights at the date of the Meeting.

This 15% limit does not apply to the Chairman or any other proxy with respect to the total number of voting rights they hold on a personal basis and in their capacity as proxy, provided each shareholder for which they act as proxy complies with the rule stipulated above.

For the purposes of applying these limits, shares held by a single shareholder include shares held indirectly or jointly in accordance with the conditions described in articles L. 233-7 and following of the French Commercial Code.

This limit ceases to apply when a shareholder acquires – either directly or indirectly or jointly with another person – more than 50.01% of the company's voting rights following a public share exchange offer.

In all general meetings of shareholders the voting right is attached to shares which entail an usufructuary right, is exercised by the usufructuary.

Special Meetings

Article 15

When there exist different categories of shares, special meetings must be convened for the holders of shares in such categories to discuss and vote under the conditions provided for by the regulations in force.

They meet at the head office or in any other place within mainland France indicated on the convocation notice.

They are chaired in the same manner as the General Meetings and the right to vote at these meetings is exercised under the same terms.

Auditors

Article 16

Auditors are appointed and discharged of their duties according to the applicable statutory and regulatory provisions.

Corporate Governance

Annual accounts

Article 17

The fiscal year is the calendar year.

The Board prepares the financial statements for the year under the conditions fixed by the applicable laws and regulations.

All other documents prescribed by the applicable laws and regulations are also drawn up.

Article 18

The results of the year are determined in accordance with applicable regulatory and statutory provisions.

A deduction is made from the profits of the year reduced by any previous losses, of at least 5% to constitute the reserve fund prescribed by law until the said fund reaches 10% of the capital.

Net income available after this transfer, increased by net income brought forward, if any, constitutes income available for distribution, to be successively allocated to ordinary, extraordinary or special reserves or to be carried forward in those amounts which the General Meeting may deem useful, upon the recommendation of the Board of Directors.

The balance is then distributed to shareholders in proportion to their share holding.

The shareholders' General Meeting approving the annual accounts may, with regard to the whole or part of the dividend or interim dividend, grant each shareholder the option to chose between payment of the dividend or interim dividend in cash or payment in shares in accordance with the conditions fixed by the laws in force. The shareholder will have to exercise his option on the whole dividend or interim dividend attached to his shares.

Other than cases of reduction of capital, no distribution may be made to shareholders if the capital of the Company is or may subsequently become less than the sum of capital and reserves that the law or the by-laws do not allow to be distributed.

Dissolution

Article 19

In the event Société Générale is wound up and unless otherwise provided by law, the General Meeting determines the method of liquidation, appoints the liquidators on proposal by the Board of Directors and continues to exercise its assigned powers during said liquidation until completion thereof.

The net assets remaining after repayment of the par value of the shares are distributed among the shareholders, in proportion to their share of the capital.

Board's internal rules* (Up dated on January 13, 2005)

Changes appear in bold italics

Preamble:

The Board of Directors of Société Générale functions in accordance with the corporate governance principles set out in the 1995, 1999 and 2002 AFEP-MEDEF reports on corporate governance. The Board's organisation and operating procedures are defined in these Internal Rules, a copy of which is included in the Company's annual report.

Article 1: Powers

The Board shall deliberate on any question coming under its legal or regulatory functions.

Moreover, the Board:

a) shall approve the Group's strategic direction and review the Group's strategy at least once a year;

b) shall approve strategic investment projects and all transactions, notably acquisitions or disposals, liable to have a material impact on the Group's earnings, its balance sheet structure or its risk profile.

Except where precluded by justified reasons of urgency, this prior approval process concerns:

• organic growth where this represents a unit amount exceeding EUR 250 million and is not already approved within the framework of the annual budget or the strategic plan;

• acquisitions for an amount exceeding EUR 400 million, or exceeding EUR 250 million where the acquisition does not fit in with the development priorities approved in the strategic plan;

• disposals for an amount exceeding EUR 250 million;

• partnerships involving a cash payment exceeding EUR 250 million;

• transactions that would result in a substantial deterioration of the Group's risk profile.

If it is impossible to convoke a meeting of the Board to deliberate on a transaction that falls under the aforementioned provisions for reasons of urgency, the Chairman shall do his utmost to obtain the opinion of all Directors before taking a decision.

The Chairman assesses on a case-by-case basis the appropriateness of convoking the Board to deliberate on a transaction that does not fall under the aforementioned categories.

During each Board meeting, the Chairman shall give a report on the transactions concluded since the previous meeting, as well as on the main projects in progress that are liable to be concluded before the next Board meeting.

* This document does not form part of Société Générale's by-laws. It is not enforceable against third parties. It may not be cited by third parties or shareholders as evidence against Société Générale or its Chief Executive Officers.

The Board shall receive copies of all press releases relating to acquisition or disposals prior to their release to the press, save where justified by reasons of urgency.

c) shall deliberate on modifications to the Group's management structures prior to their occurrence and shall be informed of the principal changes to its organisation;

d) shall deliberate on the Company's exposure to all types of risk at least once a year;

e) shall approve the report of the Board and the Board committees to be included in the Company's annual report;

f) shall approve the presentation of the Directors to be included in the annual report, including the list of independent Directors and the criteria used, based on the proposal made by the Nomination Committee;

g) shall set the compensation of the Chairman and the Company's Chief Executive Officers based on the proposal made by the Compensation Committee;

h) the Board shall approve the management report, as well as those sections of the annual report dealing with corporate governance and presenting the Company's compensation and stock options policy.

Article 2 – Meetings

The Board shall meet at least five times a year. At least once a year it shall devote an item of its agenda to an evaluation of the Board's performance.

The Directors participating in the Board meeting via videoconferencing shall be considered present for calculating quorum and majority. The nature and conditions of such videoconferencing applications shall be as determined by a décret en Conseil d'Etat.

This provision is not valid for the following decisions:

• establishment and closure of annual and consolidated corporate accounts and of the management report;

• election or removal of the Chairman of the Board;
• nomination or dismissal of the CEO;

• nomination or dismissal of the chief executive officers "délégués".

Any notices to attend Board meetings issued by the Secretary of the Board or the Corporate Secretary may be sent by letter, telex, telegram, fax of electronic mail, or be given verbally.

SOCIÉTÉ GÉNÉRALE GROUP - 2004 ANNUAL REPORT

Corporate Governance

Article 3 – Information about the Board of Directors

Each Director shall receive all information necessary for him to complete his mission and may request that all documents he deems useful be provided to him.

The Board meetings are preceded by sending, in due time, a file addressing the agenda items needing special analysis and prior reflection, whenever confidentiality rules allow.

Moreover, the Directors shall receive, between meeting, any pertinent information, including criticism, about significant events or transactions for the company. In particular, they shall receive copies of all press releases issued by the company.

The Board shall be informed at least once a year, and shall discuss from time to time, the general direction of the Group's policies regarding human resources, information systems and organisation.

Article 4 – Training of Directors

Each Director may benefit, either at the time of his appointment or during the term of his mandate, from any training that he deems necessary for the exercise of his duties.

This training shall be organised and proposed by the Company, which shall bear its cost.

Article 5 – The Board's Committees

For certain fields, the Board's resolutions are prepared by specialized Committees composed of Directors appointed by the Board, who examine the issues within their competencies and submit their advice and proposals to the Board.

There are three permanent committees:

• the Audit Committee,
• the Compensation Committee,
• the Nomination Committee.

The Board may create one or more "ad hoc'' committees.

The committees shall be chaired by a Director appointed by the Board of Directors based on a proposal made by the Nomination Committee.

The secretarial functions for each committee shall be provided by a person appointed by the Chairman of the committee.

Article 6 – The Compensation Committee

The Compensation Committee:

a) proposes to the Board the criteria for determining the compensation of the Company's Chief Executive Officers (mandataires sociaux), as well as the amount of this compensation, including benefits in kind, welfare benefits or retirement benefits, and any compensation received from Group companies; the Committee ensures that these criteria are correctly applied, in particular as regards the calculation of the variable component;

b) prepares the annual performance appraisal of the Chairman and the Company's Chief Executive Officer and convokes the outside Directors to deliberate on the same;

c) submits a proposal to the Board of Directors for the stock options policy and formulates an opinion on the list of beneficiaries;

d) prepares the decisions of the Board relating to the employee savings plan;

e) is informed of the Group's compensation policy, in particular with respect to senior managers;

f) gives the Board of Directors its opinion on the section of the annual report dealing with these issues;

g) produces an annual report submitted for the approval of the Board and intended for inclusion in the Company's annual report.

It is made up of at least three Directors, of whom at least two-thirds shall be independent as per the definition given in the Company's corporate governance rules. At least two-thirds of the Board members are independent.

The Chairman and the Company's Chief Executive Officers may be present during meetings on issues that do not concern them.

Article 7 – Nomination Committee

This Committee is assigned the task of proposing, to the Board Directors for nomination, as well as for the succession of the Chairman and the Chief Executive Officers especially in the instance of an unforeseeable opening.

The Committee carries out preparatory work for the examination by the Board of Directors of corporate governance issues. It is responsible for conducting the evaluation of the performance of the Board of Directors, which shall be carried out at least once every three years.

It submits a proposal to the Board of Directors for the presentation of the Board of Directors to be included in the annual report and notably the list of independent Directors.

It recommends candidates to the Board for Board membership, after carrying out any necessary inquiries.

It produces an annual activity report submitted for the approval of the Board and intended for inclusion in the Company's annual report.

The Nomination Committee is informed prior to the appointment of any member of the Group's Executive Committee and any head of a corporate department who does not sit on this committee. It is informed of the plan for replacing these senior managers.

It is composed of the members of the Compensation Committee and the Chairman of the Board. Its chairman is the Chairman of the Compensation Committee.

Article 8 – The Audit Committee

This Committee's mission is:

• to examine the drafts of the accounts to be submitted to the Board, with a view to verifying how they have been drawn up and to ensuring the pertinence and permanence of the principles and methods of accounting applied;
• to examine the choice of account consolidation principles;

• to examine the consolidation scope of Group companies and the corresponding justification;

• to examine the consistency of the mechanisms set in place for internal control of the procedures, risks, and ethics;

• to manage the procedure for selecting the Statutory Auditors and provide the Board of Directors with an opinion on the appointment of the Statutory Auditors, as well as on their remuneration;

• to verify the independence of the Statutory Auditors, in particular by analysing the breakdown of fees paid by the Group to the Statutory Auditors, as well as to the network to which they belong, and by approving prior to commencement all assignments that do not fall within the strict framework of statutory audit work but which are a consequence or corollary of the same, with all other assignments being prohibited;

• to examine the work program of the Statutory Auditors;

• to examine the Group's internal audit program and the annual report on internal control drawn up in accordance with banking regulations, and to formulate an opinion on the organisation and functioning of the internal control departments;

• to examine the follow-up letters sent by the Commission Bancaire (French Banking Commission) and formulate an opinion on draft responses to these letters;

• to examine the risk management policy and the policy for monitoring off-balance sheet commitments, notably in view of the memos produced to this end by the Finance Department, the Risk Division and the Statutory Auditors.

To this end, it may, as it sees fit, consult with the Chairman and the Company's Chief Executive Officers, the Statutory Auditors and the executive staff in charge of preparing the accounts, internal control, risk management and ethical compliance. The Statutory Auditors shall attend meetings of the Audit Committee, unless the Committee decides otherwise.

The Chairman of the Committee reports the Committee's work to the Board.

The Committee produces an annual activity report submitted for the approval of the Board and intended for inclusion in the Company's annual report.

The Audit Committee is made up of at least three Directors appointed by the Board of Directors, who may be neither the Company's Chief Executive Officers nor employees of the Group nor members of another committee. At least two-thirds of the Board members are independent.

Article 9 – Conflicts of interest

Any Director in a conflict of interest situation, even a potential situation, especially when it concerns his responsibilities to another corporation, should inform the Board and abstain from voting on the corresponding resolution.

Corporate Governance

The Chairman may invite him to refrain from voting on the resolution.

Article 10 – Directors' fees

One-third of total Directors' fees is equally split between all the Directors. The members of the Audit Committee each receive three portions. For Directors whose term in office did not cover the whole year, their portion is calculated according to the duration of their mandate over the period, on a pro-rata basis.

The remainder of the total is split, at the end of the year, based on the number of Board or Committee meetings in which each Director will have participated.

The compensation paid to the non-voting directors (Censeurs) for their participation in Board meetings is equal to the Director's fees paid to the Directors who were not members of a Committee, according to the terms defined hereinabove.

This article will take effect for the payment of Directors' fees in respect of the 2005 fiscal year.

Article 11 – Secret

Each Director or Non-Voting Director (Censeur) should consider himself as obligated by true professional secrecy for the confidential information that he receives in his capacity as Board member, as well as for the meaning of the opinions expressed by each one.

Director's charter(1)

(updated on January 13, 2005) Changes appear in bold italics

Article 1 – Representation

The Board of Directors represents all shareholders and acts in the best interests of the Company. Each Director represents all the Company's shareholders, regardless of the manner in which he was appointed.

Article 2 – Mission

Each Director undertakes to improve his knowledge of the Company and its sector of activity on an ongoing basis. He assumes an obligation of vigilance, circumspection and confidentiality.

Each Director undertakes to preserve his independence of analysis, judgement, decision and action in all circumstances.

Each Director undertakes not to seek, nor to accept, any benefit liable to compromise his independence.

Article 3 – Knowledge of rights and obligations

When a new Director or Non-Voting Director (Censeur) is appointed, the Corporate Secretary provides him with a file containing the bylaws, the provisions enacted by the Board governing its functioning, and a presentation of the legal principles as regards the responsibilities of Directors.

Each Director or Non-Voting Director (Censeur) may consult with the Corporate Secretary, at any time, regarding the scope of these documents and his rights and obligations as Director or Non-voting Director (Censeur).

Article 4 – Personally-owned shares

It is recommended that each Director nominated by the General Meeting (be it as an individual or as a permanent representative of a corporation) holds the equivalent of at least 600 shares, either directly or indirectly via the E-Fund where applicable.

Article 5 – Insider trading rules

Each Director or Non-Voting Director (Censeur) shall refrain from carrying out transactions on the shares of companies where (and insofar as) he has access in his capacity as Board member to privileged information not yet publicly disclosed.

Article 6 – Actions taken regarding Société Générale's stocks(2)

The Directors and Non-Voting Director (Censeur) shall abstain from acting on the stock market during the 30 calendar days prior to the publication of Société Générale's quarterly, half-yearly and annual results.

The Directors and Non-Voting Director (Censeur) shall abstain from carrying out speculative transaction or those with a leverage effect on the stocks, and, that:

• shall conserved the acquired stocks for at least two months from their date of purchase;

• shall abstain from using financial instruments likely to allow them to carry out speculative transactions. This specifically applies to put and call transactions, except when they correspond to hedging.

The same rules apply for dealings in the shares of French or foreign listed companies that are controlled directly or indirectly by Société Générale as defined in article L. 233-3 of the French Commercial Code.

The Directors and Non-Voting Director (Censeur) shall bring any difficulty they may encounter in enforcing this provision to the attention of the Corporate Secretary.

(1) This document does not form part of Société Générale's by-laws. It is not enforceable against third parties. It may not be cited by third parties or shareholders as evidence against Société Générale or its chief executive officers.

(2) Related securities means: on the one hand, securities giving the buyer the right, however this right may by exercised, to buy or sell Société Générale shares or to receive a sum calculated by referral to the current share price upon exercising this right; on the other hand, assets composed primarily of Société Générale shares or related stocks for example, units in "E-fund" (Société Générale's employee share ownership plan).

Corporate Governance

Article 7 – Transparency

The Directors of Société Générale shall register all new Société Générale securities acquired on or after June 1, 2002. It is recommended that they register any Société Générale securities held previously.

In accordance with articles L. 621-18-2 of the French Monetary and Financial Code and articles 222-14 and 222-15 of the General Regulations of the Autorité des Marchés Financiers (AMF), and in compliance with the AMF statement of December 27, 2004, Directors must report, as soon as possible, all transactions involving the acquisition, disposal, subscription or exchange of (i) Société Générale shares (ii) warrants or securities convertible into Société Générale shares, (iii) forward financial instruments based on Société Générale shares, (iv) shares in mutual funds invested mainly in Société Générale shares. Acquisitions or disposals by means of donations or inter-vivus gifts and legacies are not to be declared.

Directors must report all transactions carried out by themselves, by any dependent children living with them and by their legal spouse. They must also disclose transactions carried out by proxies (except for discretionary portfolio management services where the principal takes no part in the management of the mandate) or by a company or entity controlled by themselves.

Each transaction gives rise to a declaration to the Secretary of the Board of Directors and declarations are filed at the Corporate Secretariat.

Each reported transaction will be published in a statement posted on the AMF and Société Générale websites within five trading days of receipt of the transaction disclosure form.

Article 8 – Conflicts of interest

Each Director or Non-Voting Director (Censeur) shall inform the Board of any real or potential conflict of interest to which he may be directly or indirectly exposed. He shall refrain from participating in any discussion and voting on such matters.

Article 9 – Regular attendance

Each Director or Non-Voting Director (Censeur) shall dedicate the time needed to fulfil his duties. In the event a Director or Non-Voting Director (Censeur) accepts a new directorship or changes his professional responsibilities, he shall inform the Chairman of the Nomination Committee of the same.

The annual report shall indicate the rate of attendance at Board meetings and Committee meetings.

Each Director shall strive to attend Annual General Meeting of Shareholders.

Sustainable development

Sustainable development cross-reference index

Areas/GRI Reference documents	GRI	Global	Unep-Fi	Law/decree NRE	Page
Vision and strategy		Compact			in this report
Vision and strategy of the organization regarding its contribution to sustainable development	1.1				pp. 40-45
Statement by a member of the Executive Committee	1.2				pp. 2-3, 40
Company profile
Key economic and organizational characteristics	2.1 to 2.8				pp. 1, 8-9, 44-45, 114
Qualified description of stakeholders	2.9				p. 44
Report scopeGovernance structure and management systems	2.10 to 2.22				p. 41
Structure and governance	3.1 to 3.7 / LA 11	No. 6			pp. 22-37, 282-293
Commitments (including towards stakeholders)	3.8 to 3.12		3.3		pp. 43-44, 47
Precautionary principle	3.13	No. 7	2.1		pp. 40, 50-53, 56, 132-149
Management procedures and systems	3.14 to 3.20		2.3		p. 45
Direct and indirect economic impacts
Customers	EC1/EC2/AM3		3.2		pp. 41, 44, 47, 54-58
Community	EC10 / SCO2 / SCO2.2				pp. 41, 44, 47, 60-62
EmployeesProduct and service suppliers	EC5EC3		3.2		pp. 44, 47, 65-71, NRE appendixpp. 44, 47, 59
Providers of capital	EC6 / EC7				pp. 17-19, 44, 47
Public sector	EC8 / EC13				pp. 41, 44, 47, 60-61
Environment
Environmental policy	CSR1	No. 8	2.4	Art. 2 - 6° & 9°	pp. 47, 63-64, NRE appendix
Incorporation of environmental criteria into financing and investment	AM1 / IB1		2.2		pp. 44, 47, 56-57
Certification/evaluation	SO4		2.3 & 2.6	Art. 2 - 3°	pp. 44, 46-47, 55,
Biodiversity	EN6 / EN7	No. 8		Art. 2 - 2°	63-64, 301, NRE appendixNRE appendix
Water	EN5	No. 8	2.4	Art. 2 - 1°	p. 63, NRE appendix
Emissions, effluents and waste	EN11 / EN31	No. 8	2.4	Art. 2 - 1°	pp. 47, 63, NRE appendix
Energy	EN3 / EN 17	No. 8	2.4		pp. 47, 59, 63, NRE appendix
Suppliers	EN33	No. 9	2.4		pp. 44, 47, 59
Materials	EN1 / EN2	No. 8			pp. 63-64, NRE appendix
Products and services	EN14	No. 9	2.7		pp. 41, 44, 47, 56-58, 63-64
Compliance with agreements and with national and international regulations	EN16	No. 8	2.2	Art. 2 - 4°	pp. 40-44, 47-49, 67, NRE appendix
Transport	EN34	No. 8			pp. 47, 57, 60, 63, NRE appendix
Total environmental expendituresHuman rights	EN35			Art. 2 - 5° / 7° & 8°	NRE appendix
Human rights policy		HR1 No. 1 / No. 2			pp. 42-44, 56
Incorporation of human rights criteria
into financing and investment decisions		HR2 No. 1 / No. 2			pp. 44, 47, 56-57
Rights of indigenous and minority populations	HR12 / HR13 / HR14	No. 1			pp. 42-43, 47, 67
Staff training	HR8				pp. 44, 67-70
SuppliersFreedom of Association and Collective Bargaining		HR2/HR3 No. 1 / No. 2HR5 No. 1 / No. 3			pp. 44, 47, 59pp. 70-71
Training for security staff	HR11				pp. 51, 71
Disciplinary practices	HR9 / HR10	No. 10			pp. 52-53
Compliance with agreements and with national and international regulations	HR1 / SO2 / CSR5 No. 2 / No. 10				pp. 42-44, 47, 59, 67-68
Child labor	HR6	No. 5			pp. 42-43, 59
Forced and compulsory labor	HR7	No. 4			pp. 42-43, 59
Labor practices and decent working conditions
Social policy	INT1				pp. 67-69
Incorporation of social criteria into financing and investment decisionsDecent living conditions in countries that do not offer the strict minimum	AM3 / IB3				pp. 44, 47, 56
(housing, healthcare, etc.)	SO1 / LA12	No. 1			pp. 68, 70-71
Diversity and opportunity	LA10 / LA11 / INT4 / INT6	No. 6			pp. 43, 67-68, 70, NRE appendix
Employment (including disabled workers)	LA1 / LA2			Art. 1 - 1°-a / 7°	pp. 65-68
Outsourcing	LA1			Art. 1 - 9° & Al. 4	NRE appendix
Job protection, reclassification, support measures	LA2 / LA16			Art. 1 - 1°-b	pp. 67-70
Working hours				Art. 1 - 2°	NRE appendix
TrainingNon-discrimination	LA9 / LA17	LA 10 / LA11 No. 1 / No. 6		Art. 1 - 6°Art. 1 - 3°	pp. 44, 69-70pp. 42-43, 67
Community actions	LA12			Art. 1 - 8°	pp. 70-71
Social relations	LA3 / LA4 / LA13			Art. 1 - 4°	pp. 70-71
Heath and safety	LA5 / LA6 / LA7 /LA7 / LA15	No. 1		Art. 1 - 5°	p. 71, NRE appendix
Product responsibility
Products and services	PR2 / PR8 /INS3				pp. 57-58
Advertising	PR9				p. 55
Respect for privacy	PR3				pp. 54-55
Consumer health and safetyCommunity	PR6				pp. 44, 54-55
Corporate citizenship	SO1 / RB3	No. 1		Art. 1 - Al. 2, 3 & 5	pp. 60-62
Competition and pricing	SO7 ?				p. 55
Bribery and corruption	SO2 / SO3 / SO5	No. 10			pp. 43, 47-49

GRI (Global Reporting Initiative): 2002 guidelines and indicators, 2002 financial sector supplement; Global Compact: reference to the 10 principles set out on p. 64; UNEP-FI (United Nations Environmental Programme): Statement by Financial Institutions on the Environment and Sustainable Development; NRE (French new economic regulations law): articles 1 and 2 of decree 2002-221 of February 20, 2002 enacting article L. 225-102-1 of the French Commercial Code. N/A: not available.

SOCIÉTÉ GÉNÉRALE GROUP - 2004 ANNUAL REPORT

2004 NRE appendix

(Scope: parent company unless otherwise indicated)

Social section

Article 1 of decree 2002-221 of February 20, 2002 enacting article L. 225-102-1 of the French Commercial Code

	1° a) Total headcount	Employees on Group payroll at September 30, 2004: 92,000 (including 2,745 on fixed-term contracts).
		Employees on Société Générale parent company payroll at September 30, 2004: 36,331;at December 31, 2004: 36,361.
	1° a) Employees hired onfixed-term contracts	2,274 (Group figure)
	1° a) Employees hired onopen-ended contracts	5,473 (Group figure)
	1° a) Possible recruitmentdifficulties	Société Générale's attractiveness as an employer enables it to hire people with the desired profiles.See Human Resources/Working to promote a common strategy/Increased numbers of new recruits.
	1° a) Number of redundancies	Number of redundancies at September 30, 2004 (Group figure): 850
	1° a) Reasons for redundancies	Economic redundancies: 352Other reasons: professional inadequacy, dismissal during trial period, dismissal for professional misconduct(France and abroad).
	1° a) Overtime	At September 30, 2004 (first 9 months of financial year): 41,059 hours (for full-time staff)and 3,680 hours (for part time staff).
	1° a) Outside contractors	The use of outside contractors remains limited and principally concerns the outsourcing of specializedactivities such as information systems, security, armored transport, catering, building maintenance.Data for Société Générale parent company:Monthly average number of service providers over the first nine months of 2004: 4,915.Monthly average number of temporary workers over the first nine months of 2004: 424 (full-time equivalent).
	1° b) Information on severanceand job safeguard plans,reclassification initiatives,rehiring and supportmeasures	See Human Resources/Working to promote a common strategy/A dynamic Group.Over and above its legal obligations, the Société Générale Group looks to provide its staff with additionalsupport measures during the implementation of severance plans in its various entities (reclassification,use of outplacement firms, etc.).
2°	Organization of working time	In October 2000, the parent company signed an agreement on the reduction and organization of theworking week, which was implemented as of 2001. It provides for two systems for the organization ofworking time:• a 39-hour working week with 56 days of paid leave in addition to normal days off per week;• a working week of 37 hours 22 minutes spread over 4.5 days, with 47 days of paid leave in addition tonormal days off per week.Employees may benefit from schemes reducing the number of hours worked to 80%, 60%, 50% or even40% of the standard week.Several French subsidiaries of the Group have signed special agreements, as have numerous foreignentities.More than 5,000 staff work part-time (i.e. 5.75% of total headcount) for the Group as a whole (3,400 forSociété Générale parent company).
2°	Weekly working hoursfor full-time staff	ln France (parent company) 39 hours a week (see above).
2°	Weekly working hoursfor part-time staff	ln France (parent company), in proportion to the part time option chosen (for example, 31.2 hours a weekfor an employee working an 80% week).
2°	Absenteeism and reasons	Rate of absenteeism at the parent company (number of days absent/total number of days paid, as %) overthe first eleven months of the year: 4.4%.Main reasons: illness (2.6%) and maternity leave (1.4%).Absenteeism is monitored in all Group entities.Rate of absenteeism for the Group: 5% (illness: 2.35%, maternity: 1.63%).

3°	Employee compensation	Average annual basic salary in 2004: EUR 35,083, versus EUR 34,547 in 2003 (see 2003 Social Audit).
3°	Social security charges	All entities in the Société Générale Group comply with their obligations in terms of social security chargesIevied on employee salaries and benefits (see Note 32, page 198).
3°	Application of provisionsof section IV, book IVof the French Labor Code(employee profit sharingand incentives)	See Human Resources/Shared interests: Cohesion and personal development/Implicating staffin the performance and results of their Company.
3°	Sexual equalityin the workplace	Women make up 51.4% of total staff and 54% of new staff recruited by the Group.They are gradually occupying important positions across the Group's entities both in France and abroad.At the parent company, the salary differential between male and female staff is low: the basic salary of afemale employee averages out at 97% of that of a male employee.
4°	Professional relations	See Human Resources/Taking on board changes in the expectations of our staff…/Fostering social dialogue.
4°	Collective labor agreements	See Human Resources/Taking on board changes in the expectations of our staff…/Fostering social dialogue.
5°	Health and safety conditions	See Human Resources/Taking on board changes in the expectations of our staff…/Providing adequatesocial protection.Over the course of many years, Société Générale has developed a health and safety policy that covers anumber of areas of its activities. For example:• post trauma psychological and medical counseling for the victims or witnesses of attacks;• monitoring of food hygiene in the company catering facilities;• management of employees' health (annual medical check-up, permanent medical service at Head Office,special follow-up of expatriate staff, etc.);• information and screening linked to public health programs (tobacco, insomnia, etc.).At the same time, it permanently monitors risks that may affect the health of its staff around the world(recent example: SARS).
6°	Training	See Human Resources/Shared interests: Cohesion and personal development/Individualdevelopment/Developing the skills of employees.
7°	Employment and the integrationof disabled people	See Integration of handicapped workers.
8°	Community actions	See social audits.
9°	Outsourcing	See 1a: Outside contractors.
	The way in whichthe Company takes intoaccount the regional impactof its activities in terms ofemployment and development	See sections on "Human Resources" and "Community".
	Relations maintained withintegration associations,training bodies,environmental protectionassociations, consumerassociations and localresidents	See sections on "Human Resources" and "Community".

Sustainable development

Importance of outsourcingand how the Companypromotes the provisions ofInternational LaborOrganization (ILO)agreements amongst itssubcontractors and ensuresthey are complied with by itssubsidiaries

The Group's purchasing officers include references to Société Générale's sustainable developmentcommitments (UNEP Statement by Financial Institutions on the Environment and Sustainable Development,Global Compact) in all invitations to tender and in any new contracts, as well as to the correspondingreference documents: the Universal Declaration of Human Rights and the ILO's core agreements. Groupsuppliers undertake to comply with these texts.

The way in which the foreignsubsidiaries of the companytake into account the impactof their activities on regionaldevelopment and localpopulations

See sections on "Human Resources" and "Community".

To obtain a full set of figures for the parent company at end-December 2004, please consult the 2004 Social Audit report to be published in June 2005.

Environmental section

Article 2 of decree 2002-221 of February 20, 2002 enacting article L. 225-102-1 of the French Commercial Code

1°	Water consumption	Water: 467,955 m3 at the parent company (survey limited to 30,732 people, as it is physically impossibleto itemize consumption on many sites, particularly those subject to co-ownership).Over an extended sample group including the main French subsidiaries and 7 major foreign subsidiaries,consumption stands at 628,315 m3 for 39,285 people.
1°	Raw materials consumption	This item principally concerns the use of paper:• in 2004, the policy of reducing paper consumption was continued: use of completely recyclable envelopes(including plastic window) for customer account statements (120 million sent out per year), installation of aspooler system for envelopes, eliminating the need for cardboard boxes for the delivery of envelopes,discontinuation of the print-out of 1.1 million electronic customer files per year;• consumption of paper stood at 3,407 tons for the central offices in Paris and the provinces.
1°	Energy consumption	Electricity: 211,993 MWh at the parent company (41,501 people; 302,989 MWh for 61,669 people (parentcompany, main French subsidiaries and 14 major foreign subsidiaries).Gas: 37,667 MWh at the parent company; 82,924 MWh over an extended sample group including the mainFrench and foreign subsidiaries.Fuel and steam: 24,536 MWh at the parent company; 28,922 MWh for the extended sample group.Renewable energy sources: see below.76.7% of buildings are air-conditioned (74% of branches and 91% of head-office buildings).
1°	Measures taken to improveenergy efficiency	• All head-office buildings and network branches in France have automatic regulation systems(notably heating regulation).At the head office since 1995: limited temperature adjustment, automatic closure of blinds, switching-off oflights at set times, etc. The same system was installed at the Hong Kong offices in 2004.All the branches are equipped with a system for switching off the lighting and putting the workstations intostandby mode outside working hours. The lighting of elements on the front of the buildings (signs, etc.) isalso controlled by automatic timers, which leave only a minimum amount of equipment powered up at eachoutlet after a specified time, set in accordance with the environment (usually 10.00 pm). During branchrenovations, priority is given to installing reversible air-conditioning systems in order to save energy.Systems for recovering the heat given off by some of our refrigeration installations have been installed.Consequently, the use of recovered heat met 95% of the energy requirements for heating Tour SociétéGénérale at La Défense in 2004. Moreover, the Group's IT center near Paris has been fitted since 1995 witha system for recovering waste heat generated by the computers. This system enables the center to cover95% of its heating requirements, with the annual gains estimated at approximately EUR 200,000.The first results of the Greenhouse Gas Emissions Assessment carried out at the head office buildings haveenabled the Company to identify the key areas for improvement in energy savings (see p.63).

1°	Use of renewable energy sources	An "eco-friendly" contract was signed with EDF in November 2003 to meet 15% of electricity requirementsfor Tour Société Générale at La Défense using renewable sources. In 2004, this agreement was revisedupwards from 15% to 21%.Thus, 11 GWh out of the total annual consumption of some 54 GWh now comes from renewable sources.
1°	Ground use conditions	Not meaningful in the Company's activity.
1°	Air, water and ground pollution	Greenhouse Gas Emissions Assessment carried out in 2004 for the central offices.
1°	Sound and olfactory pollution	Not meaningful in the Company's activity.
1°	Waste treatment	Waste production stood at some 3,756 tons in 2004 at the central offices in Paris and the provinces.Waste is broken down into 16 categories, which are each treated accordingly.Agreements with service providers have been implemented for collecting, sorting and recycling all waste.Directives on the systematic recycling of fluorescent tubes were issued in 2004.
2°	Measures taken to limitany harm to the ecologicalbalance, natural environment,and protect animaland plant species	• Asbestos: Société Générale commissioned a certified body to check for the presence of asbestosin its buildings, in accordance with decree 96-97 of February 7, 1996 and decree 97-855of September 12, 1997 on the protection of the public against health risks associated with exposureto asbestos in buildings. These controls were performed on the buildings concerned in 1997 and 1998,and were followed up by steps to remove asbestos and protect the public where necessaryThose buildings qualifying as IGH (high-rise buildings) and ERP (public buildings) in accordance withthe decree of 2000 were checked by the independent control body Véritas. No specific work is requiredin this area.• Almost all the air-conditioning installations are dry systems (99.3% of branches in the Société Généralenetwork).• Transport: the location for the head office was notably decided on the basis of its proximity to a publictransport hub (La Défense/Val-de-Fontenay). As a result, public transport is used for 90% of travel to andfrom work. The use of audio and video-conferencing is encouraged to limit the need for business travel.
3°	Steps taken to obtainenvironmental assessmentor certification	Certification by the Statutory Auditors of the 2004 annual report in terms of processes and organization(see next document).An environmental reporting project is currently underway to identify consumption of energy and resources,and the first results should be published by the end of 2005.
4°	Measures takento anticipate the impactof legislative and regulatoryprovisions in this areaon the Company's activity	The departments in charge of managing Group buildings (see 6°) are responsible for applyingthe necessary legal and regulatory provisions in those areas that come under their scope of responsibility.
5°	Expenditure to preventthe Company's activitycausing any environmental damage	Spending not itemized in the entities' operating budgets.
6°	Existence of internalenvironmental managementdepartments within the Company	Société Générale has adopted a decentralized organization in this area. There is a departmentin charge of managing the head-office buildings and dedicated departments in each French orforeign branch and subsidiary. The environment forms an integral part of their mission brief.The creation of a Group property committee in 2003 is helping to improve the pooling of these initiatives.
6°	Staff trainingand information	40,000 copies of a brochure intended to raise awareness - "Let's protect our plant" - were distributedduring the second Sustainable Development week in June 2004. Regular displays indicating best practicesin terms of environmentally friendly behavior are organized within our buildings.An intranet site for head-office users sets out all the rules concerning the buildings (including bestenvironmental practices).Regular conferences are organized for staff on sustainable development issues.

Sustainable development

6°	Resources assignedto reduce environmentalrisks, as well asthe organization put in placeto handle accidental pollutionwith consequences outsidethe Company's entities	The nature of our activities does not intrinsically generate any particular sources of pollution.Obviously we apply the standard health and safety rules, which are particularly detailed forhigh-rise buildings.
7°	Total provisions and guaranteesfor environmental risks,unless this information is liableto prejudice the Company seriouslyin a lawsuit in progress	None.
8°	Total compensation paid duringthe period pursuant to acourt decision relatedto the environment andthe legal proceedings takento obtain damages	None.
9°	Full details of the objectivesthat the Company setsits subsidiaries outsideFrance with regardto points 1° to 6° above	The environmental policy applies to all Group entities.

Environmental reporting project: Main consumption of energy and resources (1)

	2002	2003	2004
Water (in m3)	488,608	547,710	628,315
Water/person (in m3)	18.4	18.6	16.0
Scope (no. of people)	26,502	29,416	39,285

(1) Data are not comparable from one year to the next due to changes in the scope covered.

	2002	2003	2004
Electricity (in MWh)	207,200	282,651	302,989
Gas (in MWh)	32,360	89,240	82,924
Fuel and steam (in MWh)	24,639	30,545	28,923
Energy/person (in MWh)	6.5	7.2	6.7
Scope (no. of people)	40,582	55,727	61,669
Energy/m2 (in kWh)	263	225	226

Independent verification statement on the information relating to corporate social responsibility (CSR)

At the request of Société Générale, we have performed the procedures agreed upon relating to the social and environmental responsibility part of the group's annual report in order to verify the consistency of the information presented with our findings resulting from our work.

The information provided in this 2004 annual report was prepared under the responsibility of the management of Société Générale. Our responsibility is to report our findings in accordance with the agreedupon work described below.

Nature and scope of work

We have completed the following agreed procedures:

• Review of the report content to identify the main assertions related to the group's achievements with respect to the implementation of CSR activities and to CSR performance.

• Interviews with:
• the CSR managers,

– persons concerned by the implementation of CSR activities in Corporate functions, like ethics, risks, human resources or purchasing departments (11 interviews),

– persons concerned by the implementation of CSR activities in the operations: corporate and investment banking, retail banking and financial services, asset management and private banking (14 interviews),

• Search on a test basis, for underlying evidence such as minutes of CSR Committees or other meetings, internal and external presentations, group inspection reports, studies or survey results that support the previously-identified assertions.

In accordance with International Audit Standards, procedures of this kind do not include all the controls specific to an audit providing a moderate or high level of assurance but still allow us to report our findings and observations.

Findings and observations

• On the basis of our work, the content of the social and environmental responsibility part of the annual report is consistent with our findings.

• The awareness and gradual integration of social and environmental responsibility issues in the performance of the bank activities have been continuous.

• CSR indicators have been specified in order to monitor the performance of the bank in these areas.

Neuilly-sur-Seine, March 11, 2005

Christian Mouillon Eric Duvaud Ernst & Young Audit Environment and Sustainability

Additional information

General information

Corporate name Société Générale

Head office 29, boulevard Haussmann, 75009 Paris

Administrative office

17, Cours Valmy, 92972 Paris-La Défense

Legal form

Société Générale is a limited liability corporation (Société Anonyme) established under French law and having the status of a bank.

Governing law

Subject to the legal and regulatory provisions relating to credit institutions, notably the applicable articles of the Code monétaire et financier (French Monetary and Financial Code), the Company is governed by commercial legislation, in particular articles 210-1 et seq. of the Code de commerce (French Commercial Code).

Société Générale is a credit institution authorized to act as a bank. As such, it can carry out all banking transactions. It is notably authorized to provide all investment services or related services described in articles L. 321-1 and L. 321-2 of the French Monetary and Financial Code. In its capacity as an investment services provider, Société Générale is subject to regulations applicable to the same. It must notably comply with a number of prudential rules and is subject to the controls carried out by the Commission bancaire (French Banking Commission). Its management and all employees are bound by rules governing professional secrecy, violation of which is punishable by law. Société Générale also acts as an insurance broker.

Date of formation and duration

Société Générale was incorporated by deed approved by the decree of May 4, 1864. The company will expire on December 31, 2047, unless it is wound up or its duration extended.

Corporate purpose (article 3 of the by-laws)

The purpose of Société Générale is, under the conditions determined by the laws and regulations applicable to credit institutions, to carry out with individuals and corporate entities, in France and abroad:

• all banking transactions;

• all banking-related transactions, including in particular investment services or related services as listed in articles L. 321-1 and L. 321-2 of the French Monetary and Financial Code;

• all acquisitions of interests in other companies.

Société Générale may also engage on a regular basis in all transactions other than those listed above, including in particular insurance brokerage, under the conditions set by the Comité de la réglementation bancaire et financière (French Banking and Financial Regulations Committee).

Generally, Société Générale may also carry out, on its own account, on behalf of third parties or in a joint venture, all financial, commercial, industrial or agricultural personalty and realty transactions, directly or indirectly related to the above-mentioned activities or likely to facilitate the accomplishment of such activities.

Registration number

Société Générale is registered in the Registre du commerce (Commercial Register) under number: 552 120 222 RCS Paris. ISIN code (International Securities Identification Number): FR 0000130809

APE code (business activity code): 651C

Company reports and documents

All Société Générale's reports and documents, including in particular its by-laws, financial statements and reports submitted to shareholders' meetings by the Board of Directors and the Statutory Auditors, may be inspected at the Company's administrative offices at Tour Société Générale, 17, Cours Valmy, 92972 Paris-La Défense Cedex, France.

The current version of the by-laws has been registered with public notaries "Thibierge, Pône, Fremeaux, Palud, Sarrazin, Sagaut et Chaput" in Paris, France.

Fiscal year

The fiscal year starts on January 1 and ends on December 31.

Allocation and distribution of income (article 18 of the by-laws)

Net income for the year is determined in accordance with currently applicable laws and regulations.

At least 5% of net income for the year, less any previous losses, must be set aside by law to form a legal reserve until the said reserve reaches one-tenth of total capital stock.

Net income available after this transfer, increased by any net income brought forward, constitutes income available for distribution to be carried forward or allocated to ordinary, extraordinary or special reserves in those amounts which the General Meeting may deem useful, upon the recommendation of the Board of Directors. The remaining balance is then paid out to shareholders in proportion to their shareholding.

The General Meeting called to approve the financial statements for the year may, in respect of all or part of final or interim dividends proposed for distribution, offer each shareholder the option to receive payment of the final or interim dividend in cash or in shares, under the conditions laid down by current regulations. Shareholders who exercise this option must do so for all the final or interim dividends attributable to their shareholding.

Except in cases of a reduction in capital stock, no distribution to shareholders may take place if shareholders' equity is, or will be as a result of such distribution, less than an amount equal to the sum of capital stock and those reserves that cannot be distributed by law or under the Company's by-laws.

Convocation of, admission to and organization of shareholders' meetings

(from article 14 of the by-laws)

The General Meeting is made up of all Société Générale shareholders.

It is called and deliberates as provided for by legal provisions in force.

The Meeting may be publicly broadcast if decided by the Board of Directors and announced in the notice of meeting and/or convocation.

It meets at the Company's head office or in any other place in mainland France indicated in the convocation notice.

Such meetings are chaired by the Chairman of the Board or, in his absence, by a Director appointed for the purpose by the Chairman of the Board.

Regardless of the number of shares held, all shareholders have the right, upon proof of their identity, to participate in the General Meetings, by personally attending them, by returning their ballot by mail or by a representative, provided that:

• in the case of holders of registered shares, their names are entered in the Company registry;

• in the case of holders of bearer shares, they have deposited at the place mentioned in the convocation notice, a certificate delivered by a qualified person stating that the shares in their account are unavailable for sale up to the date of the Meeting;

• where applicable, they provide the Company with proof of their identity, in line with the legal provisions in force.

These formalities must be completed at least two days, or a shorter period if mentioned in the convocation notice, before the Meeting is held, unless the regulations in force shorten this period.

The registration and non-transferability of shares may only be revoked in accordance with the regulations in force.

Shareholders may participate in General Meetings by videoconference or any other means of telecommunication authorized by the law, subject to the conditions set by the law and when stipulated in the meeting notice.

In all General Meetings of Shareholders, the voting right attached to shares that entail an usufructuary right is exercised by the usufructuary.

Double voting rights (from article 14 of the by-laws)

As from January 1, 1993, double voting rights in relation to the share of capital stock they represent are allocated to all those shares that are fully paid up and that have been registered in the name of the same shareholder for at least two years. Double voting rights are also allocated to new registered shares that may be allocated freely to a shareholder in respect of the shares with double voting rights already held by him, on the occasion of an increase in capital stock by incorporation of reserves, unappropriated retained earnings, net income or additional paid-in capital.

(legal provisions)

These double voting rights are rendered null and void ipso jure if the shares are converted into bearer form or if ownership of the shares is transferred. Nevertheless, transfers through inheritance, the liquidation of marital assets, or transfers to a spouse or direct parent do not result in the loss of rights and do not affect the minimum two-year holding period.

Limitation of voting rights (from article 14 of the by-laws)

The number of votes at General Meetings to be used by one shareholder, either individually or by proxy, may not exceed 15% of total voting rights at the date of the meeting. This 15% limit does not apply to the Chairman or any other proxy with respect to the total number of voting rights they hold on a personal basis and in their capacity as proxy, provided each shareholder for whom they act as proxy complies with the rule stipulated above. For the purposes of applying these limits, shares held by a single shareholder include shares held indirectly or jointly in accordance with the conditions described in articles L. 233-7 et seq. of the French Commercial Code. This limit ceases to apply when a shareholder acquires – either directly, indirectly or jointly with another person – more than 50.01% of the Company's voting rights following a public offer.

Declaration of shareholdings exceeding statutory limits (from article 6 of the by-laws)

Any shareholder acting on his own or jointly, who comes to hold directly or indirectly at least 0.5%* of the capital or voting rights or a multiple thereof, must inform the Company within fifteen days of the time at which he exceeds each of these thresholds, and must also indicate in his declaration the number of any securities he holds which may give rise to his holding capital stock in the future.

Mutual fund management companies must provide this information based on the total number of shares held in the Company by the funds they manage.

Failure to comply with this requirement will be penalized in accordance with legal provisions on this matter, at the request of one or more shareholders with at least a 5% holding in the Company's capital or voting rights. The said request will be duly recorded in the minutes of the General Meeting.

Any shareholder acting on his own or jointly, is also required to inform the Company within fifteen days if the percentage of his capital or voting rights falls below each of the thresholds described in paragraph 2 above.

Business of Société Générale

History

Société Générale was founded in 1864 by public subscription. It rapidly became involved in the financing of industrial and infrastructure investments through lending, equity investments and bond issues.

Société Générale progressively built up a nationwide network, with 1,500 branches in 1940, compared with 32 in 1870.

This network still remains the core of its business.

After the Franco-Prussian war in 1870, the Alsace-Moselle branches were transferred to a German law subsidiary, Société Générale Alsacienne de Banque (Sogénal).

After opening its first foreign office in London in 1871, Société Générale rapidly developed an international network through the extension of Sogénal's network into central Europe (Germany, Austria, Switzerland and Luxembourg), and by establishing branches in North Africa in 1909-1911 and later in the United States (1940).

Société Générale was nationalized in 1945, and it played an active role in financing post-war reconstruction and meeting the needs born of the thirty years of rapid economic growth that followed the Second World War. It contributed to the spread of new financing techniques (such as medium-term discountable credit, off-balance sheet operations and lease finance).

Following the liberalization of the French banking system in 1966, Société Générale diversified its activities and reached out to new categories of customers. In particular, it expanded its clientele of individual customers.

Wholly owned by the French state after its second nationalization in 1982, Société Générale was returned to the private sector when it was privatized in July 1987.

The acquisition of Crédit du Nord in 1997 confirmed the Société Générale Group's commitment to take full advantage of the restructuring and concentration within the French banking system.

Société Générale has expanded considerably since 1997, notably extending its international presence via acquisitions in its different businesses.

The Group has notably developed its retail banking network outside France with acquisitions in Romania, the Czech Republic, Tunisia and Greece. It also acquired GEFA-ALD in Specialized Financial Services, Hambros (UK) and Compagnie Bancaire Genève in Private Banking, Yamaichi (Asia) and TCW (US) in Asset Management, and SG Cowen (US) in Corporate Banking.

Person responsible for the reference document and persons responsible for the audit of the financial statements

Person responsible for the reference document

Mr. Daniel Bouton, Chairman of the Board of Directors of Société Générale.

Certification of the person responsible for the reference document

To the best of my knowledge, the information set out in the reference document is true and includes all the information needed by investors to form an opinion regarding Société Générale's assets and liabilities, business, financial position, results and prospects. There are no omissions that could impair its meaning.

Chairman and Chief Executive Officer Daniel Bouton

Persons responsible for the audit of the financial statements

Statutory Auditors

Name: Ernst & Young Audit represented by Mr. Christian Mouillon Address: 11, allée de l'Arche - 92400 Courbevoie Date of first appointment: April 18, 2000 Term of mandate: six fiscal years End of current mandate: at the close of the Shareholders' General Meeting which will approve the financial statements for the year ended December 31, 2005.

Name: Deloitte et Associés

represented by Mr. José-Luis Garcia. Address: 185, avenue Charles-de-Gaulle - 92200 Neuilly-sur-Seine Date of first appointment: April 18, 2003 Term of mandate: six fiscal years

End of current mandate: at the close of the Shareholders' General Meeting which will approve the financial statements for the year ended December 31, 2005.

Substitute Statutory Auditors

Gabriel Galet Alain Pons

Report of the Statutory Auditors on the Reference Document

This is a free translation into English of the statutory auditors' report on the registration document issued in the French language and is provided solely for the convenience of English speaking readers. The statutory auditors' reports on financial statements and consolidated financial statements,referred to in this report, include information specifically required by French law in all audit reports, whether qualified or not, and this is presented after the Opinion on the financial statements. This information includes (an) explanatory paragraph(s) discussing the auditors' assessment(s) of certain significant accounting and auditing matters. These assessments were considered for the purpose of issuing an audit opinion on the annual and consolidated financial statements taken as a whole and not to provide separate assurance on individual account captions or on information taken outside of the annual and consolidated financial statements.

This report should be read in conjunction with, and construed in accordance with French law and professional auditing standards applicable in France.

Year ended December 31, 2004

To the shareholders of Société Générale,

In our capacity as statutory auditors of Société Générale and in compliance with article No. 211-5-2 of the AMF General Regulation, we have verified, in accordance with French professional standards, the information in respect of the financial position and historic financial statements of Société Générale included in the accompanying Reference Document (Document de référence).

This Reference Document is the responsibility of the Chairman of the Board of Directors. Our responsibility is to issue a conclusion on the fairness of the information contained therein with respect to the financial position and financial statements.

We conducted our examination in accordance with French professional standards. This examination consisted in assessing the fairness of the information on the financial position and financial statements and to verify their consistency with the audited accounts. We also read other financial information contained in the Reference Document in order to identify any significant inconsistency with information in respect of the financial position and financial statements and to bring to your attention any obvious misstatements we noted based on our general understanding of the company gained through our audit. The prospective information presented by management is based on their intention and not on a properly prepared individual component or item. Ernst & Young Audit and Barbier Frinault & Autres have performed an audit of the annual and consolidated financial statements for the year ended December 31, 2002 drawn up by the Board of Directors, in accordance with French professional standards. Their report was unqualified.

We have performed an audit of the annual and consolidated financial statements for the years ended December 31, 2003 and December 31, 2004 drawn up by the Board of Directors, in accordance with French professional standards. Our reports were unqualified but contained, for the annual and consolidated financial statements as at December 31, 2003 an emphasis of matters on the changes in accounting principles resulting from the application of the Regulation CRC-2002-03 related to the accounting treatment of the credit risk and of the Regulation CRC-2002-10 related to asset amortization and depreciation. We have performed an audit of the consolidated financial statements for the year ended December 31, 2004, which were restated in accordance with International Financial Reporting Standards ("IFRS"), as adopted in the European Union. We conducted our audit in accordance with French professional standards. Our report was unqualified, with respect to the establishment of these restated consolidated financial statements, in all significant aspects, in accordance with the rules described in the accompanying notes to these accounts, but contained an emphasis on the following matters:

• Note 1 "First time adoption of IFRS" explains that the restated consolidated financial statements have been prepared based on the existing standards and interpretations as of January 1, 2005 and why there is a possibility that the restated consolidated financial statements may require adjustment before their inclusion as comparative information in the consolidated financial statements for the year ended December 31, 2005, when the Company prepares its first set of consolidated financial statements in accordance with IFRS as adopted in the European Union ;

• Because the restated consolidated financial statements for the year ended December 31, 2004 have been prepared as part of the company's conversion to IFRS as adopted by the European Union in respect of the preparation of the 2005 consolidated financial statements, they do not include comparative information relating to 2003, nor all the explanatory notes required by IFRS as adopted in the European Union, which would be necessary to provide, in accordance with these standards, a fair view of the assets, liabilities, financial position and results of the consolidated group of companies.

On this basis, we have nothing to report with respect to the fairness of the information on the financial position and financial statements contained in the Reference Document.

Neuilly-sur-Seine and Courbevoie, March 21, 2005

José-Luis Garcia Christian Mouillon SOCIÉTÉ GÉNÉRALE GROUP - 2004 ANNUAL REPORT

The Statutory Auditors

DELOITTE & ASSOCIES ERNST & YOUNG Audit

Additional information

Additional information

The Statutory Auditors' reports on the annual accounts and on the consolidated accounts for the year ended December 31, 2004, which contain the statutory auditors' justification of assessments in accordance with article L. 225-335 of the French Commercial Code, are included in this Reference Document respectively on pages 224 and 209.

The Statutory Auditors' report, prepared in accordance with article L. 225-335 of the French Commercial Code, on the report prepared by the President of the Board of Directors of Société Générale, on the internal control procedures relating to the preparation and processing of financial and accounting information, is included in this Reference Document on page 163.

Reference document cross-reference index

	Pages		Pages
Certification of persons responsible		Financial information
for Reference Document		Consolidated financial statements and notes
Certification of the person responsible		to the consolidated financial statements*	164 to 208
for the Reference Document	308	Off-balance sheet commitments	164 and 165
Certification of the Statutory Auditors	309	Fees paid to the Statutory Auditors
Information policy	308 and inside back cover	and members of their networks	27
		Regulatory capital adequacy ratios	150 to 152
General information		Parent company financial statements and notes
■ Capital		to the financial statements	210 to 223
Details on the share capital	306
Unissued authorized capital	16, 228 and 229	Corporate governance and internal control
Potential capital	16, 228 and 229	Composition and functioning of administrative,
5-year overview of changes in capital	226	management and supervisory bodies	22 to 26 and 28 to 31
		Composition and functioning of the Board Committees	23 to 25
■ Securities markets		Report of the Chairman on corporate governance	22 to 25
Evolution of share price and trading volumes over 18 months	15	Report of the Chairman on internal control procedures	152 to 162
Dividends	14	Report of the Statutory Auditors on internal
		control procedures (financial and accounting information)	163
Capital and voting rights		Chief executive officers (remuneration and benefits,
Current breakdown of capital and voting rights	16 and 225	vested and exercised stock options)	34 to 37
Changes in share ownership structure	16	Ten beneficiaries of the largest number
Shareholder agreements	227	of stock options who are not chief executive officers
		(vested and exercised stock options)	37
Group activity		Related-party agreements	282
Group organization	114
Key figures	8 and 9	Recent developments and future prospects	129
Sectoral information	10 to 13, 72 to 110, 115 to 128
Markets and competitive positioning of the Company	72 to 110
Investment policy	4 to 181
Performance indicators	8 and 9
Analysis of Group risk exposure
■ Risk factors	133 to 149
Market risks	140
Specific risks linked to activity	146 and 147
Legal risks	147
Industrial and environmental risks	63 and 149
■ Insurance and hedging of risks	149

Pages

* See also notes to IFRS statements, pages 241-271.

Addendum

(subsequent to the filing of the document with the AMF)

Page 274 Report of the Board of Directors on the resolutions submitted to the General Meeting

The following text is to be added after the first paragraph:

Furthermore, your company has received from shareholders holding more than 0.5% of the capital a draft resolution; your Board of Directors has decided not to approve this resolution.

Page 276 Reports and resolutions submitted to the General Meeting VII is replaced by the following text:

VII – Resolution not approved by the Board of Directors: removal of the clause restricting voting rights

Your company has received from shareholders holding more than 0.5% of the capital a draft resolution to remove from article 14 of the by-laws the clause restricting voting rights to 15%.

After discussion, your Board of Directors has decided not to approve this resolution. The clause restricting voting rights adopted in 2000 remains fully relevant:

• it was introduced by the General Meeting, on the basis of the recognition that in a company with a widespread capital such as yours and taking into account a turnout at General Meetings lower than 50%, a shareholder which came to hold over 15% of the voting rights, i.e. more than one-third of the voting rights exercised at the General Meeting, could in practice control decisions taken by the Meeting;

• the clause limiting voting rights to 15% is therefore aimed at protecting shareholders against an attempt to take control, without paying the premium that would be justified for such control;

• far from providing protection against a public offer, as it is not applicable when a shareholder holds more than 50% of the capital, this clause is a guarantee for shareholders that nobody will obtain control of decisions made by the General Meeting without launching a public take-over bid on 100% of the shares of the company and offering shareholders a fair price taking into account the value of the acquisition of a controlling interest in the company.

The Board of Directors has examined this matter on several occasions since 2000 and recommends that the General Meeting reject a proposal that would go against the interests of shareholders.

VIII – Delegation of authority

The thirteenth resolution is a standard resolution that grants general powers to the Board to carry out all necessary formalities.

Page 281 Resolutions submitted to the General Meeting

The following resolution is added after the twelfth resolution:

Resolution A (not approved by the Board of Directors)

The General Meeting removes from article 14 of the by-laws any provision restricting the voting rights that a shareholder may exercice at a General Meeting.

Internet: www.socgen.com Investor Relations

Didier Valet Tel: 33 (0) 1 42 14 01 97

Pascale Massoud-Ayoub Tel: 33 (0) 1 42 14 36 93

Press relations

Jérôme Fourré E-mail: jerome.fourre@socgen.com Tel: 33 (0) 1 42 14 25 00

Stéphanie Carson-Parker

E-mail: stephanie.carson-parker@socgen.com Tel: 33 (0) 1 42 14 95 77

Tel: 33 (0) 1 42 14 49 48 Fax: 33 (0) 1 42 14 28 98

Communications Department

Tour Société Générale 92972 Paris - La Défense Cedex

Société Générale

Head office: 29, boulevard Haussmann - 75009 Paris Tel: 33 (0) 1 42 14 20 00 A French corporation founded in 1864 Common stock: EUR 542,691,448.75 552 120 222 RCS Paris

Translation Willemetz Consultants

Design and production L'Agence Synelog - Paris - 33 (0)1 53 00 74 29

Printers Fot - Lyon

Illustrations

P. 92: Fondation Antoni Tapies, Barcelona Pp. 97 and 107: Harrison & Wolf

Photos

Adagp, Paris 2005 - Jean-Marie Cras - Getty Images - Dieter Kik - Edouard Legros - Mark Lyon - Patrick Messina - Alistair Overbruck - Pascal Quennehen - Benoît Roland - Thomas Ruff - Société Générale - Véronique Védrenne - Philippe Zamora - Yi Zhou - DR.

RETAIL BANKING & FINANCIAL SERVICES ■ GLOBAL INVESTMENT MANAGEMENT & SERVICES ■ CORPORATE & INVESTMENT BANKINGRef. 170185