SocGen Lifts Profitability Target in New Plan
Societe Generale lifted its profitability target as CEO Slawomir Krupa aims to cut costs and boost investor payouts with a new strategy. The French lender increased the goal for its return on tangible equity to between 13% and 14% in 2029 and to more than 15% after that, according to a statement Monday. Bloomberg’s Tom Metcalf reports. (Source: Bloomberg)
Societe Generale has raised its profitability goals, aiming to achieve a cost-to-income ratio under 55% by 2029. This is a significant improvement from the current target of 60%. CEO Slawomir Krupa has unveiled a new strategic plan to drive a turnaround for the French bank, with the objective of cutting costs further and increasing returns on tangible equity.
The bank anticipates revenues to grow by an annual average of around 3% and has set a target of 13-14% for 2029, rising to 15% in subsequent years. SocGen plans to reduce overall costs by 2% by 2029, mainly through lower procurement and IT expenses, AI-related productivity gains, and staff reductions due to natural attrition. The bank's performance has improved in recent years, with rising profits due to higher interest rates and cost-cutting programs.
Krupa expressed his ambition to accelerate profitable growth, maintain cost discipline, and reassure investors who had previously reacted negatively to his previous strategic plan in September 2023.
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