Société Générale: late weekend

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( — The Societe Generale fell 1.6% to 21.65 euros this Friday, although the group exceeded analysts’ expectations yesterday, thanks in particular to the resumption of its retail banking activity in France. Over the last three months of the fiscal year, the bank’s group share of net income fell by 59.8% year-on-year, to €430 million, above the market consensus of €333 million.
Net banking income fell by 9.9% in the fourth quarter, to 5.96 billion euros. Market activities fell by 0.8%, the bank further indicated, the good performance of equity activities having offset the 22.1% decline in rates, credit and foreign exchange activities.

Revenues from the retail banking in France, private banking and insurance division fell by 14.3%, but Société Générale emphasizes that this quarter was “nevertheless marked by the start of the rebound in the net interest margin” .

Far from the mark?

The group’s general director, Slawomir Krupa, unveiled a strategic plan last September aimed at turning around the bank, specifying that the establishment was targeting gross cost savings of around 1.7 billion euros by 2026. Profitability on tangible net assets stood at 1.7% in the last quarter of last year, still far from the objective presented in September, which plans to achieve a profitability ratio on tangible equity of 9% to 10% in 2026…

The group finally announced that it wanted to propose a dividend of 0.90 euros per share. Société Générale also plans to launch a share buyback program worth 280 million euros… Among the latest broker opinions, BNP Paribas Exane remains ‘neutral’ on SG with a marginally adjusted price target of 28 at 27 euros.


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