The logo of French bank Societe Generale is seen outside a bank office in Nantes, France, February 4, 2022. REUTERS
LONDON, Sept 21 (Reuters) – Societe Generale lifted a key performance target out to 2029 and said it would trim costs further under a new strategic plan unveiled on Monday that forms the next phase of CEO Slawomir Krupa’s effort to drive a turnaround of the French lender.
France’s second-biggest listed bank said it was targeting a return on tangible equity of between 13% and 14% in 2029, up from around 11% this year, which is far below peers, and then 15% in 2030 and beyond. SocGen’s relatively high costs and weak profitability have dogged the company for years, with Krupa vowing to change that after he took the helm in 2023 and launched an initial three-year plan that has started to bear fruit following a difficult start.
SocGen said on Monday it would reduce overall costs to below 16.3 billion euros by 2029, a drop of 2% versus 2026 levels, by spending less on procurement and IT, through AI-related productivity gains and from a reduction in the number of staff through natural attrition.
The bank is aiming for a cost-to-income ratio of below 55% by 2029, against a current target of 60%. Revenues across the bank are forecast to rise by an annual average of around 3%.
SocGen has seen its performance rebound in the past two years, reporting rising profits thanks to higher interest rates that have boosted bank coffers across Europe and a cost-cutting programme.Krupa will be hoping this new strategic plan is received more favourably after his last one in September 2023 landed badly, with shares falling sharply in reaction.
“Today, we are entering a new phase. Our ambition is clear: to accelerate our profitable growth and maintain rigorous risk and cost discipline,” he said in a statement.
Shares in SocGen have nearly tripled since early 2025, outpacing the STOXX Europe 600 banks index as investors welcomed his focus on costs and capital.
But the bank is still worth less than half French rival BNP Paribas , and faces the tougher task of proving it can generate sustained growth when digital lenders are expanding in its core French retail market and U.S. banks continue to gain ground in investment banking.
Performance at SocGen’s investment bank, its largest division, has disappointed in recent quarters.
SocGen also said on Monday its payout policy to shareholders via dividends and buybacks would remain unchanged. If it hits its targets, it could distribute 21 billion euros ($24.11 billion) over a four-year period to 2029.
Reporting by Tommy Reggiori Wilkes Editing by Nick Zieminski
