Société Générale reports sharp decline in earnings due to decline in net banking income

A logo outside a Societe Generale SA bank branch in Paris, France.

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

The French lender reported group net profit of 430 million euros, slightly above consensus analysts’ forecasts of 404 million euros, according to LSEG data, but well below the 1.07 billion euros recorded for the final quarter of 2022. reported a group net profit of 295 million euros for the third quarter, as the investment bank’s resilient performance offset a sharp decline in its retail business in France.

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

However, quarterly net banking revenue fell 9.9% year-on-year to 5.96 billion euros, which the bank attributed largely to declines in net interest income in its French retail business and its division banking and private insurance, together with the negative impacts resulting from the liquidation of hedges.

SocGen announced that it will offer shareholders a cash dividend of 90 cents per share and will launch a share buyback plan for 280 million euros, equivalent to 35 cents per share.

Other key data reported by the bank include the CET1 ratio, which at the end of the year stood at 13.1%, the reported return on tangible capital for the fourth quarter of 1.7% and a cost/income ratio of 78 ,3%.

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

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

“At the same time, although 2023 was negatively affected by a sharp decline in net interest income in French Retail Banking and high LeasePlan integration costs, it was also characterized by disciplined management of costs, risks and capital.”

Online and mobile banking branch BoursoBank was a particular focus for Soc Gen, recording a record quarter for new customer acquisition with 566,000 compared to a year ago. Brings BoursoBank’s total customers to 5.9 million by the end of 2023.

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