SocGen performs better than expected in Q2, offsetting sale of Rosbank



by Julien Pontus

PARIS (Reuters) – Societe Generale on Wednesday reported a lower-than-expected second-quarter loss, with the momentum of its activity in both retail banking and markets offsetting the impact of the sale of its subsidiary, Russia’s Rosbank.

The third largest French bank by market capitalization, which had warned that the sale of its operations in Russia to Interros Capital would cost it around 3.3 billion euros, simultaneously announced new financial targets for 2025.

SocGen, which has started a process to find its next CEO to succeed Frédéric Oudéa, said it posted a €1.48 billion net loss in the second quarter, while analysts expected a loss of around €2 billion.

At the same time, the bank confirmed the launch of a EUR 915 million share buyback program.

On the stock market, Societe Generale shares are up more than 4%.

“These are clearly excellent results, with the good news of the share buyback and ambitious but achievable targets,” said Jérôme Legras, Research Director at Axiom Alternative Investments.

Net banking income was also ahead of expectations at €7.06 billion, while the bank’s better-than-expected expenses nonetheless allowed for a positive jaw effect.

In market activities, revenues rose 23.3% to 1.52 billion euros, with a 50% jump in interest, credit and foreign exchange operations.

In retail banking, revenues increased 8.5% in France and 12.7% internationally.

At the group level, the bank has a return on equity (ROTE) of 10.5%, a level SocGen aims to maintain through 2025.

“These momentum and achievements make us confident both in the short-term in an undeniably more uncertain environment, and in the medium-term,” said Frédéric Oudéa, CEO of SocGen, in a press release.

“By 2025 (…) we confirm our ability to deliver a 10% return based on a 12% headline target while maintaining an attractive distribution policy for our shareholders,” he added.


By 2025, SocGen is also targeting a cost-to-income ratio of less than or equal to 62% and a payout ratio of its results of 50%.

Last May, the bank announced that it had completed the sale of its operations in Russia following the war in Ukraine and Western countries’ sanctions against Moscow.

In the same month of May, during the general meeting of SocGen shareholders, Frédéric Oudéa surprised the financial world by announcing that he would not seek to renew his mandate at the helm of the bank in May 2023.

Group CEO Lorenzo Bini Smaghi later hinted that the name of Frédéric Oudéa’s successor would be revealed this autumn.

The choice of the next chief executive is a decision of the board of directors, but Frédéric Oudéa has advocated an internal candidacy to lead the bank for the next ten to fifteen years.

Rumors of his successor surround Sébastien Proto, who is currently leading the merger of SocGen’s retail banking networks in France, and Slawomir Krupa, the head of Corporate and Investment Banking (BFI).

The names of former SocGen such as Philippe Heim, the head of the Postbank, Jean-Pierre Mustier, the former general manager of Unicredit, or Jacques Ripoll, who has just left Crédit Agricole, are mentioned without being named as favorites.

For its part, BNP Paribas last Friday reported better-than-expected results for the second quarter, thanks to the reduction in bad debt provisions, despite the economic slowdown and lively activity in market activities such as retail banking.

(Report by Julien Ponthus and Ingrid Melander, French version by Matthieu Protard, edited by Jean Terzian and Nicolas Delame)

Kaddouri Ismail

I am Ismail from Morocco, I work as a blogger and online marketer. I am also the founder of the “Mofid” site, in which I constantly publish many important articles in the field of technology, taking advantage of more than 5 years of experience working in the field. I focus on publishing in a group of areas, the most important of which are programming, e-marketing, digital currencies and freelance work.

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