Company Reports

Societe Generale set a new 13%-14% return on tangible equity target for 2029 at its capital markets day. Getting there means a 2% lower cost base and 3% annual revenue growth over 2026-29, with 80% of profits returned through dividends and share buybacks.

Société Générale will continue down the path that has led to its recovery over the last three years. It believes a lower absolute cost base, modest revenue growth, stable cost of risk, and returning 80% of earnings to shareholders should deliver its 2029 return on tangible equity target of 13%-14%.

SpaceX has filed for one of the largest IPOs in history, with Anthropic and OpenAI expected to follow in the most significant fundraising cycle in years. No European bank holds a lead equity arranger role; that honor belongs to five US banks.

European banks have declined around 10% from their highs as rising oil and gas prices and the prospect of higher-for-longer interest rates fuel fears that loan defaults will rise.

Guidance from Société Générale's recent results suggests the bank aims for revenue growth above 2% in 2026, with costs down by about 3% and a return on tangible equity above 10%.

Société Générale has executed its 2023 strategy effectively. It has streamlined its portfolio, reduced costs, and improved shareholder distributions while maintaining a solid buffer above minimum capital requirements.

Societe Generale reported a 3% increase in revenue for the third quarter, considering the disposals completed throughout the year. This was supported by 1% lower operating expenses, which, together with a reduced cost of risk, led to a 19% increase in net income. Shares declined 4% on Oct. 30, 2025.

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.

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.

Société Générale delivered strong results, showing impressive cost management that contributed to a 30% quarter-over-quarter and 70% half-over-half increase in net income. The bank announced a share buyback program and an interim dividend. Shares rose 7% on the market open on July 31.

Société Générale booked a twofold increase in net income and a notable 10% improvement in its group efficiency ratio, outpacing the FactSet-compiled consensus. However, the stock declined 2% since the market open on April 25.

No-moat Société Générale reported solid fourth-quarter 2024 results, significantly outpacing company-compiled consensus on both top-line and bottom-line estimates. For the full year, the group's net income reached EUR 4.2 billion—an almost 70% increase from 2023. This growth was driven by the bank's focus on cost savings, as operating expenses remained flat year over year while gross income grew by 7%. In 2025, the bank expects to continue delivering revenue growth while keeping costs under control. After revising our model assumptions, we have raised our fair value estimate to EUR 31.70 per share from EUR 29.30. Shares jumped 10% at the start of trading on Feb. 6 and gained around 25% year to date, and currently we view them as slightly overvalued.

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.

No-moat Societe Generale reported solid results, marking a rebound after several disappointing quarters, which was positively received by investors as shares surged nearly 9% following the European market's opening on Oct. 31, 2024. Alongside its earnings, SocGen announced management changes, with Leopoldo Alvear appointed CFO beginning in January 2025, new heads of French retail, and Philippe Aymerich stepping down as deputy CEO. We view these changes as positive steps, showing SocGen's commitment for necessary changes to secure the bank's future. We maintain our fair value estimate at EUR 29.3 per share.

No-moat Societe Generale is selling its UK and Swiss private banking subsidiaries (SG Kleinwort Hambros and Societe Generale Private Banking Suisse) to Swiss bank Union Bancaire Privee for EUR 900 million. We have mixed feelings about this deal. While we have long advocated a more focused geographical strategy for SocGen, we see private banking as an attractive business that is capital-light, has sticky clients, and generates decent profitability. The bulk of private banking revenue comes from fee income, which provides a balance to interest rate-dependent net interest income, which tends to form the bulk of a retail bank's revenue. Even before this deal, SocGen had much lower asset and wealth management exposure than its French peers, partially explaining its lower relative profitability. The main benefit from the UK and Swiss disposal is the release of 10 basis points of common equity Tier 1 capital.

While no-moat Societe Generale reported significantly improved results for the second quarter of 2024, the lower guidance for its struggling French retail unit was disappointing. Net income grew by 24% year on year and was 60% higher than the depressed first quarter. Like many of its peers, SocGen enjoyed a strong quarter in its investment banking operation, as equity trading revenue benefited from increased volatility. Crucially, SocGen’s cost/income ratio is moving in the right direction, coming in at 68% for the quarter compared with 74% for fiscal 2023. Its target of a below 60% cost/income ratio by 2026 still looks aggressive. SocGen reported a 7% return on tangible equity for the second quarter—SocGen issues guidance of 9%-10% ROTE in 2026, which we have not viewed as feasible. We do, however, note the progress made in the recent quarter. We keep our fair value estimate at EUR 29.30/share.

No-moat Societe Generale reported a 22% lower group net income for first-quarter 2024 compared with the respective period of 2023. In addition, a significant increase in the cost of risk amounted to EUR 400 million or 27 basis points, which is in line with the group’s guidance for 2024. However, this amount is slightly higher than the average cost of risk in 2022-23. The cost/income ratio of 75% appeared to be slightly lower than in the previous quarter. Operating costs were hit by transformational charges, which should result in a lower efficiency ratio of 71% for 2024 as guided by an ambitious 60% in 2026, which we do not see as feasible yet. Societe Generale needs to report higher efficiencies to prove it can reach these goals. An additional contribution to decreased net income came from a EUR 84 million loss after the disposal of Societe Generale’s Moroccan business, which was announced earlier in first-quarter 2024. We keep our fair value estimate of EUR 29.30/share, which we updated recently.

We increase our fair value estimate slightly for Societe Generale by 3% to EUR 29.30 per share, from EUR 28.50 per share. Our medium-term revenue estimates are in line with guidance and we expect a recovery in 2024 revenue as we don't expect further losses from Societe Generale’s interest-rate hedging program. Societe Generale’s 2026 cost/income target of below 60% looks aggressive, especially given the higher cost base that we expect from agreed salary increases. Societe Generale looks cheap compared with the sector, although its profitability is also materially below that of its rivals. Societe Generale’s lower profitability constrains the potential for higher dividend payouts and share buybacks; which is in sharp contrast to many of its peers who offer high shareholder distribution yields.

Societe Generale, or SocGen, has not been able to generate a level of profitability ahead of its cost of capital since 2006, and 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 inflexion point where further cost-cutting will result in damage to the franchise.

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.