Societe Generale Ramps Up Payouts as Profitability Soars
Paris, February 9, 2023 - Societe Generale SA (GLE.PA) announced the end of its phase of capital buildup, paving the way for increased shareholder payouts on the back of enhanced profitability.
Key Highlights:
* Return on tangible equity target of 8% by 2025, surpassing analyst expectations
* Share price surge of over 9%
* €1.7 billion investor payout, including a €872 million buyback program and increased dividend (€1.09 per share)
* Net income more than doubled to €1.04 billion
Improved Profitability and Capital Position:
SocGen's core capital ratio of 13.3% has reached a solid level, enabling the bank to shift its focus to profitability. The bank achieved revenue growth of over 3%, cost reductions of 1%, and higher profitability for the year ahead.
Strong Performance in Equity Trading:
Revenue from equity trading increased 10% to €831 million, driven by favorable market conditions and the US presidential election results.
Leadership Changes and Restructuring:
In October 2024, SocGen announced a management team revamp, with the appointment of Leopoldo Alvear as CFO and Slawomir Krupa assuming leadership of the French retail banking business. The bank continues to explore the sale of its German consumer finance business, Hanseatic Bank.
Impact of Political Changes:
Political uncertainty in 2024 depressed French bank shares, but SocGen remains optimistic despite planned tax hikes on companies and share buybacks. The bank's global reach is expected to mitigate the impact of these measures.
Outlook:
SocGen anticipates continued revenue gains in 2025, with a focus on structured finance and M&A advisory. The bank's cost-to-income ratio is expected to remain below 71%.
Disclaimer:
This article is for informational purposes only and does not constitute financial advice.