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Paris — Societe Generale doubled its profit in the fourth quarter thanks to a rebound in retail banking and strong equity trading, with shareholder payouts at the high end of expectations lifting its shares.
SocGen CEO Slawomir Krupa has so far struggled to convince investors of his turnaround plan. But his focus on cost control, asset sales, and margin improvement is starting to pay off, bringing a key 2026 profitability target within reach.
“SocGen delivered a good set of results,” Royal Bank of Canada said in a note. “More progress in 2025 supported by cost control (-1% underlying) should provide more confidence that 2026 is in reach”, he added, referring to the bank’s strategic plan.
SocGen shares were up by 10% in early trading, the highest since February 2022, after it posted quarterly net income of €1.04bn, exceeding the €814m average of 18 analyst estimates compiled by the bank.
Total revenue rose 11.1% to €6.62bn, slightly above an average estimate of €6.41bn, the bank said.
Revenue at SocGen’s large investment banking operations, which represent close to two-thirds of group earnings, increased — though the 12% year-on-year rise fell short of French rival BNP Paribas and banks elsewhere.
SocGen’s cost-to-income ratio, a measure of efficiency, also beat expectations, though it is still above peers. SocGen also said it beat its client acquisition target for BoursoBank, France’s leading online bank.
Retail recovers
Krupa was appointed CEO in 2023 after years of lacklustre performance and missed targets on controlling costs, which had knocked investor confidence in France’s third-largest listed lender.
He aims to lift the group’s return on tangible equity to 9%-10% in 2026. Profitability is improving, but still way behind rivals.
SocGen said its return on tangible equity reached 6.9% in 2024 from 4.2% in 2023. This year, it is targeting more than 8%.
Analysts have said they want to see a sustained improvement in earnings before hailing Krupa’s revival plan. But they will welcome a 36% year-on-year rebound in net interest income — the difference between what banks earn on loans and what they pay on deposits — at its French retail unit after an earlier miscalculated hedging policy on interest rates cost SocGen more than €2bn.
SocGen said it would pay out 50% of its net income to shareholders, at the top of a range it had set.
It plans a higher-than-expected share buyback programme of €872m, though its dividend, at €1.09 a share, was slightly below expectations.
Reuters
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