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Societe Generale SA

GLE: XPAR (FRA)

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Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
	€67.80	Vmcqr	Yfsq

Societe Generale Earnings: Light at the End of Net Interest Income Tunnel

Feb 8, 2024

No-moat Societe Generale reported another uninspiring set of results to close out a disappointing 2023. Net interest income remained under pressure as the regulated nature of French savings deposits and Societe Generale's interest-rate hedging program prevented it from sharing the upside presented by higher interest rates. However, Societe Generale is guiding toward a strong recovery in net interest income during 2024, provided the regulated interest rate on French deposits does not increase and the forward interest-rate path broadly materializes. As we expected, the normalization of second-hand vehicle prices continues, placing pressure on the margins of Societe Generale's consumer finance business. Despite a strong performance in equity trading, its revenue from securities trading remained under pressure due to weakness in trading fixed-income securities.

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