Societe Generale posts sharp profit drop as net banking income slides

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Societe Generale on Thursday reported a sharp decline in fourth-quarter net profit on the back of weaker net banking income, but launched a new 280 million euro ($302 million) share buyback program.

The French lender posted group net income of 430 million euros, slightly above a consensus analyst forecast of 404 million euros, according to data from LSEG, formerly known as Refinitiv, but well below the 1.07 billion euros recorded for the final quarter of 2022. It comes after Societe Generale posted group net income of 295 million euros for the third quarter, as resilient investment bank performance offset a sharp downturn in its French retail business.

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 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