Societe Generale posts sharp drop in profit as net banking income slips

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Logo outside the Societe Generale SA bank branch in Paris, France.

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Societe Generale Thursday reported a sharp decline in net profit in the fourth quarter 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 the consensus analyst forecast of 404 million euros, according to LSEG data, but well below the 1.07 billion euros last year. to register for the last quarter of 2022. group net income of 295 million euros for the third quarter, as the stable performance of the investment bank offset a sharp decline in its French retail business.

Thursday’s result brought 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, the bank’s quarterly net income fell 9.9% year on year to 5.96 billion euros, which the bank attributed mainly to a decline in net interest income in French retail, and its private banking and insurance sector, along with the negative effects of divestment. hedges.

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

Other key figures reported by the bank included its CET1 ratio, which sat at 13.1% by the end of the year, its reported return on tangible equity for the fourth quarter of 1.7%, and a ratio cost-to-income of 78.3%.

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

“BoursoBank’s unique momentum, the strength of our Global Banking and Investor Solutions franchises, the performance of our international banking operations across all sectors, as well as the ability of our new bank in France and Ayvens to deliver unprecedented transformations the function of all the strong proof points on it. our ability to perform at a high level,” Krupa said in a statement.

“At the same time, although a sharp decrease in net interest income in the French Retail Bank had a negative impact on 2023 and the increased cost of the LeasePlan integration, it was also characterized by a disciplined management of costs, risks and capital.”

BoursoBank’s online and mobile banking subsidiary was a notable Soc Gen highlight, posting a record quarter for new customer acquisition at 566,000 compared to a year ago. It will bring BoursoBank’s total clients to 5.9 million by the end of 2023.

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