Societe Generale confident despite fall in full-year revenue

Despite the decline, its cost-to-income ratio remained stable at 73.8%, with operating expenses showing a marginal increase of 0.3%, and transformation charges of around €730m were incurred during the year.

Despite those challenges, the group saw a notable uptick in net income, rising 37% on the year to €2.5bn.

Revenues for the fourth quarter specifically came in at €6bn, down by 9.9% compared to the same period in 2022.

However, the reported cost-to-income ratio for the fourth quarter stood at 78.3%, showing a slight improvement from the previous quarter.

Group net income for the quarter totaled €430m, representing a decrease of 60% compared to the same quarter in the previous year.

On the operational front, Societe Generale said its global banking and investor solutions, and its international retail banking franchises, delivered strong annual and quarterly performances.

Additionally, there were signs of recovery in the French retail sector during the fourth quarter, particularly in net interest income, following a challenging year marked by the negative impact of short-term hedges.

Looking ahead, Societe Generale said it was aiming for enhanced commercial performance in 2024 through the deployment of new relationship models and front-office reorganisation.

The bank said it intended to focus on business portfolio management, operational efficiency, and disciplined risk management to achieve its financial targets for the year.

Those targets included revenue growth of at least 5% compared to 2023, a cost-to-income ratio of less than 71%, a net cost of risk between 25 and 30 basis points, and a return on tangible equity of more than 6%.

“2023 was a year of transition and transformation - 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,” said chief executive officer Slawomir Krupa.

“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.

“Drawing on our new strategic and financial plan that was presented in September, we are writing a new chapter in the history of the group, which, for the last 160 years, has assisted millions of clients by way of responsible, long-term relationships.”

Krupa said the company’s ambition was to position Societe Generale among Europe’s “top-tier, rock-solid and sustainable” banks, and to create long-term value for stakeholders.

“We are entering 2024 with confidence and determination, a year that will see the meticulous execution of our strategic plan and an unwavering commitment to reach our financial targets, which will notably involve improved operational efficiency.

“We will provide precise, regular and transparent reports on our progress toward our announced 2026 objectives.”

At 1031 CET (0931 GMT), shares in Societe Generale were up 0.05% in Paris at €22.25.

Reporting by Josh White for Sharecast.com.