Business

Key targets in SocGen’s new strategy plan By Reuters



© Reuters. FILE PHOTO: A logo of French bank Societe Generale is seen on the company’s skyscraper at the financial and business district of La Defense near Paris, France September 14, 2023. REUTERS/Gonzalo Fuentes/File Photo

(This Sept. 18 story has been corrected to fix SocGen’s reported second-quarter group cost-to-income ratio which stood at 65.8%, not 75%, in paragraph 5)

LONDON (Reuters) – Societe Generale (OTC:)’s new CEO Slawomir Krupa pledged on Monday to cut costs to boost profits by 2026 amid stagnating sales, in his first strategic plan for France’s third-biggest listed bank.

Here are key targets:

GROWTH

Annual revenue growth expectations between 0 and 2% by 2026.

In August last year, the bank said it was aiming for average annual revenue growth of at least 3% for 2021-2025.

ROTE

Targets a 9 to 10% return on tangible equity ratio in 2026, up from a reported 5.6% ROTE at the end of June. Just over a year ago, SocGen was aiming for ROTE of 10% in 2025.

COSTS

Targets a cost-to-income ratio of less than 60% in 2026 from 65.8% in the second quarter. A year ago, it said it aimed for a cost-to-income ratio of 62% or below.

CET1

Aims for a CET1 ratio – a key measure of financial strength – of 13% in 2026, almost on par with the 13.1% reported at end of June. In August last year, the bank aimed for a CET 1 capital ratio of 12% in 2025.

PAYOUT RATIO

Payout ratio range is targeted at between 40% and 50% of reported net income, from 2023.

ASSET SALES

Krupa said he wants a simplified business portfolio. SocGen said it would sell four African units and review a fifth one on the continent but gave no other updates.

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