Societe Generale posts sharp profit drop as net banking income slides

Thursday’s result took France’s third-largest listed bank’s annual net profit to 2.49 billion euros, slightly above analyst expectations of 2.15 billion euros.

However, quarterly net banking revenue dropped 9.9% year-on-year to 5.96 billion euros, which the bank attributed largely to a decline in net interest income in French retail, and its private banking and insurance division, along with the negative impacts from unwinding hedges.

SocGen announced that it would be proposing a cash dividend to shareholders of 90 cents per share, and launching a 280 million euro share buyback, equivalent to 35 cents per share.

Other key figures the bank reported included its CET1 ratio, which sat at 13.1% to end the year, its reported return on tangible equity for the fourth quarter of 1.7%, and a cost-to-income ratio of 78.3%.

Group CEO Slawomir Krupa said 2023 was “a year of transition and transformation” for the bank, which is targeting revenue growth of 5% or above in 2024.

“The exceptional momentum of BoursoBank, the strength of our Global Banking and Investor Solutions franchises, the performance of our international banking activities across all regions, plus the capacity of our new bank in France and Ayvens to implement unprecedented transformations are all strong proof points on our ability to execute at a high level,” Krupa said in a statement.

“At the same time, while 2023 was negatively affected by a sharp decrease in net interest income in French Retail Banking and the elevated cost of integrating LeasePlan, it was also characterised by disciplined management of costs, risks and capital.”

Online and mobile banking subsidiary BoursoBank was a particular highlight for the Soc Gen, posting a record quarter for new client acquisitions at 566,000 compared to a year ago. It takes BoursoBank’s total clients to 5.9 million by the end of 2023.