Societe Generale posts sharp profit drop as net banking income slides

Societe Generale on Thursday reported a pointy decline in fourth-quarter web revenue on the again of weaker web banking earnings, however launched a brand new 280 million euro ($302 million) share buyback program.

The French lender posted group web earnings of 430 million euros, barely above a consensus analyst forecast of 404 million euros, based on knowledge from LSEG, previously generally known as Refinitiv, however nicely beneath the 1.07 billion euros recorded for the ultimate quarter of 2022. It comes after Societe Generale posted group web earnings of 295 million euros for the third quarter, as resilient funding financial institution efficiency offset a pointy downturn in its French retail enterprise.

Thursday’s outcome took France’s third-largest listed financial institution’s annual web revenue to 2.49 billion euros, barely above analyst expectations of two.15 billion euros.

Nevertheless, quarterly web banking income dropped 9.9% 12 months on 12 months to five.96 billion euros, which the financial institution attributed largely to a decline in web curiosity earnings in French retail, and its personal banking and insurance coverage division, together with the adverse impacts from unwinding hedges.

SocGen introduced it will be proposing a money dividend to shareholders of 90 cents per share, and launching a 280 million euro share buyback, equal to 35 cents per share.

Different key figures the financial institution reported included its CET1 ratio, which sat at 13.1% to finish the 12 months, its reported return on tangible fairness for the fourth quarter of 1.7%, and a cost-to-income ratio of 78.3%.

Group CEO Slawomir Krupa stated 2023 was “a 12 months of transition and transformation” for the financial institution, which is focusing on income development of 5% or above in 2024.

“The distinctive momentum of BoursoBank, the energy of our International Banking and Investor Options franchises, the efficiency of our worldwide banking actions throughout all areas, plus the capability of our new financial institution in France and Ayvens to implement unprecedented transformations are all sturdy proof factors on our skill to execute at a excessive stage,” Krupa stated in an announcement.

“On the identical time, whereas 2023 was negatively affected by a pointy lower in web curiosity earnings in French Retail Banking and the elevated value of integrating LeasePlan, it was additionally characterised by disciplined administration of prices, dangers and capital.”

On-line and cell banking subsidiary BoursoBank was a specific spotlight for the SocGen, posting a document quarter for brand new consumer acquisitions at 566,000 in contrast with a 12 months in the past. It took BoursoBank’s complete purchasers to five.9 million by the tip of 2023.