How to invest the savings you made during the lockdown period, between the prospect of a rebound in the economy, uncertainties about the future and impact investments?
While there are historical precedents for the nature of the pandemic - think, for example, of the Antonine plague in the 2nd century, the Great Plague which affected more than a third of the European population in the 14th century, or, more recently, the Spanish flu epidemic in 1917-19 - the pandemic crisis which has been underway for more than eighteen months now has found unprecedented responses on the part of the public authorities, with, on the one hand, a synchronous halt to the economies and societies of the world, and, on the other hand, a monetary and fiscal reassurance for economies through unprecedented support measures.
This massive public support did not prevent France, like the other European economies, from experiencing a major recession in 2020, with an 8%(1) fall in its gross domestic product (GDP). For the past twelve months, in the wake of the large-scale vaccination of the population, activity has been picking up vigorously for the various agents and sectors of the economy, although several of them remain weak, with potentially perilous social, financial and economic consequences in the medium term.
However, although their savings rate was already among the highest in Europe, the French saved massively: the Banque de France estimates that 140 billion euros were hoarded during the confinements. Most of this money was deposited in current accounts and regulated passbook savings accounts, which yielded low returns but provided protection(2). If part of these savings correspond to deferred consumption and have already been partially reinjected into the economy with the reopening of shops and holidays, the government would also like to encourage the French to spend these additional savings in order to support employment, innovation and companies that have been tested by this shock.
To encourage the French to invest their savings, we think that two sine qua non conditions must be met: firstly, to restore the confidence of households, investors and businesses in the country's ability to spring back, its legal and fiscal stability, and its rigorous medium-term management of public spending and debt after the "whatever it takes" approach; secondly, to direct savings towards projects that will contribute to building the productive, innovative and sustainable economy of tomorrow's France.
Precisely, the Prime Minister presented one year ago, on September 3, 2020, the "France Relance" plan, a roadmap for the economic, industrial, technological, social and environmental reconstruction of the country. With a total of 100 billion euros, the "France Relance" plan aims at a growth surplus of 4 points of GDP by 2025. At the same time, the Minister of the Economy, Finance and Recovery has indicated on several occasions his desire not to increase taxes and to simplify the life of companies. These two aspects of public action seem to us to be inseparable.
The "competitiveness and innovation" component of the recovery plan creates the conditions to support the French economy via lowering production taxes, future investment plans, strengthening companies' equity capital and supporting industrial investment.
The role of banks and insurers, as custodians of French savings, is crucial to the implementation of this plan. Therefore Société Générale Private Banking has been working for almost a year to meet the growing expectations of its clients to contribute to the reconstruction of the French economy by offering solutions that are in line with three social trends that have been accelerated and amplified by the crisis.
Recovery to support the country's exit from the crisis. Société Générale Private Banking was the first French bank to offer, as of January 2021, the Private Equity fund launched by the Banque publique d'investissement (BPI), "BPI France Entreprises 1", for its clients. 95 million sought by the BPI, most of which was raised through Société Générale Assurances life insurance policies(3). In addition, the in-house fund "29 Haussmann Sélection France", managed by our management company dedicated to SG 29 Haussmann private bank clients, is a solution for mobilising clients' savings in French small and mid caps. This fund was awarded the "Relance" label in March 2021.
The "made in France", to invest in short circuit in regional companies and support the employment areas of our territories . With the acquisition in 2018 of LUMO, a digital platform for investing in local projects linked to the ecological transition (solar farms, hydroelectric power plants, biomass, etc.), Societe Generale has positioned itself as a committed player in sustainable finance: it offers its customers, throughout the country, the possibility of supporting the economic fabric and employment near them.
Relocation", to help companies relocate part of their production to France when this movement makes sense from an industrial point of view, and thus enable France to recover its sovereignty over production deemed strategic for the country. The government has identified the health, electronics, agri-food and telecommunications sectors as priorities. Société Générale Private Banking enables its clients to support the health sector, from nursing homes to healthtech through various investment solutions: structured products based on sector indices, specialised real estate, Private equity with a strong sectoral component, UCITS, ETFs(4).
In short, the crisis is opening up opportunities for savers. In a context of low interest rates and high equity markets, Société Générale Private Banking has recognised expertise to support its clients: a bank committed to the development of the regions, a player in the energy transition, a leader in the field of structured products, among the forerunners in identifying and investing in the economic and social themes of tomorrow. Close to its clients, it also aims to play its role as a citizen at the heart of the recovery and reconstruction of the country's economy.
(1) Source: INSEE, January 2021
(2) "The impact of the Covid-19 crisis on the financial situation of companies and households in July 2021", Banque de France, July 2021
(3) See joint SG-BPI press release of April 2021, taken up by several press articles.
(4) UCITS: Undertakings for Collective Investment in Transferable Securities // ETF: An ETF (Exchange Traded Fund) or tracker is a financial instrument listed on the stock exchange that replicates the performance of a stock market index in real time. By subscribing to such a product, the investor bears the risk of losing the capital invested.
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