Societe Generale Shares Climb After Bank Raises Profitability Target

By Michael Hennessey and Adria Calatayud

Societe Generale shares rose after the bank said it is targeting cost cuts and revenue growth to boost profitability through the end of the decade, including widening its use of artificial intelligence.

Shares in Societe Generale were up 4% in early morning trade Monday, taking the stock's year-to-date gain to nearly 10%.

The French bank said it aims to reduce its 2029 costs by about 2% compared with its expected level for this year, and deliver annual growth in group revenue of around 3% on average between 2026 and 2029. Capital distributions to shareholders could top 21 billion euros ($24.12 billion) over the 2026-29 period, it added.

Societe Generale Chief Executive Slawomir Krupa said the group aims to accelerate its profitable growth while maintaining cost discipline.

The bank said it is targeting a return on tangible capital--a key profitability metric for banks--of between 13% and 14% in 2029 and more than 15% in 2030 and beyond. For 2025, it reported the metric at 10.2%.

Shares in Societe Generale have nearly tripled since Krupa launched an initial three-year plan to improve profitability in 2023. Under that plan, Societe Generale targeted a return on tangible capital above 10% for 2026. The bank has seen increased profit in the last two years, boosted by higher interest rates and reduced costs.

In its new strategic plan, the company said it would reduce expenses through a cut in IT spending and procurement costs, while expanding its use of AI. The bank also expects to reduce the number of employees through natural attrition, though it didn't specify a number.

The bank anticipates between 500 million euros and 600 million euros in savings from the use of AI, including around 350 million euros embedded by 2029.

Societe Generale noted that it has signed a strategic agreement with Anthropic, as part of its aim to accelerate the use of corporate AI.

"This collaboration will strategically strengthen our productivity while increasing the quality of the service offered to our clients," the bank said.

The company said it would focus its investments on activities which offer the best returns. It said these include digital unit BoursoBank, wealth and savings, parts of its global banking and investor solutions division, activities in eastern Europe and mobility company Avyens.

Societe Generale said it aims to expand the client base of BoursoBank to more than 14 million at the end of 2029 from 9.1 million at the end of the second quarter.

The bank said it expects ordinary distribution to shareholders to exceed 13 billion euros over the 2026-29 period through a combination of dividends and buybacks, and that additional payouts of excess capital could amount up to around 8 billion euros.

Write to Michael Hennesssey at michael.hennessey@wsj.com and Adria Calatayud at adria.calatayud@wsj.com

(END) Dow Jones Newswires

September 21, 2026 03:45 ET (07:45 GMT)