For Société Générale, Strategy Reshuffling Pays Off

Société Générale, or SocGen, has not been able to generate a level of profitability ahead of its cost of capital since 2006. We do not anticipate any changes that will position the bank to outearn its cost of capital on a consistent basis. Cost-cutting can potentially improve profitability, but there is also an inflection point where further cost-cutting will result in damage to the franchise.