The logo of French bank Societe Generale is seen outside a bank building in Paris, France, April 25, 2025. REUTER
PARIS, Feb 6 (Reuters) – Societe Generale sailed past fourth-quarter profit forecasts on Friday after cost cuts and stronger retail sales offset a notable drop in revenue at its investment bank, and the French lender lifted a key profitability target for 2026.
The lender’s fourth-quarter group net income jumped 36% from a year earlier to 1.42 billion euros ($1.68 billion), 21% higher than the average estimate of 12 analysts compiled by the company.
Revenue over the period rose 1.6% to 6.73 billion euros, above the average estimate of 6.65 billion euros. Operating expenses came in slightly lower than expected, France’s second-biggest listed bank said.
SocGen under CEO Slawomir Krupa has sought to reverse years of underperformance by pursuing a twin strategy of reducing costs and strengthening the bank’s core capital.
The approach has helped revive confidence at a time when foreign investors have become more selective about French lenders amid political instability and tax increases aimed at shoring up public finances.
SocGen’s shares have risen about 140% over the past year, more than double the roughly 60% gain in the STOXX Europe 600 Banks index .
In a sign of confidence, the bank’s board unanimously decided to renew Krupa’s mandate as CEO for another four years beginning in 2027.
FICC REVENUE CONTRACTS SHARPLY
The bank lifted its 2026 target for return on tangible equity – a key profitability measure – to more than 10%, versus a previous range of 9% to 10%. The target is still lower than at rivals, including BNP’s near 13%.
SocGen said it expected revenue growth of more than 2% in 2026 and a cost reduction of around 3%. It maintained a goal of a cost-to-income ratio below 60%, nearly five percentage points lower than it was in the fourth quarter.
But SocGen’s investment banking division, its largest, saw sales decline – in contrast to gains at European and U.S. peers – by 2.3% to 2.41 billion euros, missing expectations. Fixed income, currencies and commodities (FICC) trading revenue dropped 13.3%.
The French lender also unveiled a new 1.46 billion euro share buyback programme, and said it would propose a total cash dividend of 1.61 euros per share in 2026.
Reporting by Mathieu Rosemain; Editing by Tommy Reggiori Wilkes
