SocGen lifts 2029 profitability target, eyes deeper cost savings
Societe Generale on Monday announced a new strategic plan targeting a return on tangible equity of 13% to 14% by 2029, up from around 11% this year, and aims for a cost-to-income ratio below 55% by the same year.
SocGen unveils plan out to 2029 with new financial targets Return on tangible equity target rises to 13% to 14% in 2029 SocGen aims for cost-to-income ratio below 55% by 2029 Shareholder payout policy stays unchanged, bank says (Adds analysts quotes in paragraphs 3-4) By Tommy Reggiori Wilkes LONDON, Sept 21 (Reuters) — Societe Generale lifted a key performance target to 2029 and pledged deeper cost cuts to achieve it under a new strategic plan announced on Monday, marking the next phase of CEO Slawomir Krupa's turnaround of the French lender.
France's second-biggest listed bank said it aims for a return on tangible equity of 13% to 14% in 2029, up from around 11% this year, which is far below other large European lenders, before reaching 15% in 2030 and beyond. SocGen's relatively high cost base and weak returns have weighed on performance for years, with Krupa vowing to change that after taking over in 2023 and launching an initial three-year plan that has begun to show results.
Analysts described the new targets as slightly better than expected, with the focus on reducing costs seen as encouraging, although Jefferies described a target for bank-wide revenues to grow by an average of 3% a year as "somewhat low ball". "The beauty of today's plan is that management clearly have visibility on the cost trajectory and have outlined a series of highly idiosyncratic actions on the cost base," Jefferies said. 27% gain for the wider banking index. 3 billion euros by 2029, a drop of 2% versus 2026 levels, by spending less on procurement and IT, through AI-related productivity gains and from reduced staff numbers through natural attrition.
The bank is aiming for a cost-to-income ratio of below 55% by 2029, against a current target of 60%. SocGen's performance has recovered in the past two years, reporting rising profits thanks to higher interest rates that have boosted bank coffers across Europe, and cost cuts. Krupa will hope that investors will respond more favourably than they did to the previous strategic plan in September 2023, which triggered a sharp selloff in the shares. "Today, we are entering a new phase.
Our ambition is clear: to accelerate our profitable growth and maintain rigorous risk and cost discipline," he said in a statement. Shares in SocGen have nearly tripled since early 2025, outpacing the STOXX Europe 600 banks index, as investors welcomed his focus on costs and capital. S. banks continue to gain ground in investment banking.
Performance at SocGen's investment bank, its largest division, has disappointed in recent quarters. SocGen also said its payout policy to shareholders via dividends and buybacks would remain unchanged. 11 billion) over a four-year period to 2029. com)