Societe Generale’s Profit Drops Sharply as Banking Income Slides

Societe Generale Posts 2023 Net Profit of 430 Million Euros, Launches New Share Buyback Program

Societe Generale, one of France’s leading banks, has reported a significant decline in fourth-quarter net profit due to weaker net banking income. However, the bank has also announced the launch of a new 280 million euro ($302 million) share buyback program.

Despite the decline in net profit, the French lender managed to post a group net income of 430 million euros, which was slightly above the consensus analyst forecast of 404 million euros. Nevertheless, this number is well below the 1.07 billion euros recorded for the final quarter of 2022. In the third quarter, the bank had posted a group net income of 295 million euros, showing the impact of resilient investment bank performance offsetting a downturn in its French retail business.

Societe Generale’s annual net profit now stands at 2.49 billion euros, slightly surpassing analyst expectations of 2.15 billion euros. However, the bank experienced a 9.9% year-on-year drop in quarterly net banking revenue, which amounted to 5.96 billion euros. This decline was largely attributed to a decrease in net interest income in French retail, as well as in its private banking and insurance division, along with the negative impacts from unwinding hedges.

The bank has proposed a cash dividend to shareholders of 90 cents per share and has also launched a 280 million euro share buyback, equivalent to 35 cents per share. Additionally, it reported a CET1 ratio of 13.1% to end the year, a reported return on tangible equity for the fourth quarter of 1.7%, and a cost-to-income ratio of 78.3%.

Societe Generale’s Group CEO, Slawomir Krupa, described 2023 as “a year of transition and transformation” for the bank and expressed the company’s goal of achieving revenue growth of 5% or more in 2024. Krupa also highlighted the exceptional momentum of the online and mobile banking subsidiary, BoursoBank, which posted a record quarter for new client acquisitions, reaching 566,000 new clients compared to the previous year and bringing its total clients to 5.9 million by the end of 2023.

Krupa emphasized the bank’s achievements, including the strength of its Global Banking and Investor Solutions franchises, the performance of its international banking activities across all regions, and the capacity of its new bank in France and Ayvens to implement unprecedented transformations. He also noted the disciplined management of costs, risks, and capital in 2023.

Overall, Societe Generale remains optimistic about its future, with a focus on driving revenue growth and continued transformation. As the bank moves forward, it aims to build on its strengths and address the challenges it faced in the previous year.

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