Societe Generale Q4 Profit Weak; Confirms FY25 View

Societe Generale Group reported Wednesday a weak profit in its fourth quarter, despite higher net banking income. Further, the French Financial services major proposed a dividend and around 440 million euros share buyback program. The company also confirmed fiscal 2025 financial targets.

Frederic Oudea, Chief Executive Officer, said, “Building on the commercial momentum of the businesses and the strength of the balance sheet, the Group is confident of being able to reap the benefit of ongoing projects and business developments, confirms its financial guidance for 2025, and is embarking with determination on 2023, a year of transition in many respects.”

Looking ahead for fiscal 2023, the company expects a transition year, with the negative impacts related to the end of the TLTRO benefit and to the specific functioning of the French retail banking market.

Underlying cost to income ratio, excluding contribution to the Single Resolution Fund, is expected at between 66 percent and 68 percent. Cost of risk is expected at between 30 and 35 basis points.

For 2025, the company continues to expect a cost to income ratio below 62 percent, expected profitability of 10 percent (ROTE) based on a CET1 ratio target of 12 percent post Basel IV.

The Board of Directors approved its distribution policy to an equivalent of 2.25 euros per share. A cash dividend of 1.70 euros per share will be proposed at the General Meeting of Shareholders on May 23. The dividend will be detached on May 30 and paid out on June 1.

In addition, the company is planning to launch a share buyback programme for a total of around 440 million euros, i.e., equivalent to 0.55 euro per share.

In its fourth quarter, Group net income fell 35.1 percent to 1.16 billion euros from last year’s 1.79 billion euros.

Underlying Group net income was 1.13 billion euros, compared to 1.23 billion euros a year ago.

Operating income fell 5.4 percent from last year to 1.86 billion euros, and underlying operating income dropped 2.6 percent to 1.75 billion euros.

Meanwhile, gross operating income grew 10.7 percent to 2.28 billion euros, and underlying gross operating income went up 15 percent to 2.17 billion euros.

Net banking income was 6.89 billion euros, up 4 percent from prior year’s 6.62 billion euros. Underlying net banking income grew 6 percent.

The results were driven by strong performances in Financing & Advisory, Global Markets and ALD, strong growth in Private Banking and International Retail Banking and a solid performance by the French Retail Bank.

In Paris, Societe Generale shares were trading at 27.79 euros, down 0.86 percent.

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