Profit at Societe Generale slumps 60 per cent as boss calls 2023 ‘year of transition’
Continued weakness in retail banking caused quarterly profits to slump at Societe Generale as boss Slawomir Krupa faced more scrutiny on his plans to turn around the bank.
Revenue in the final quarter of last year was down 9.9 per cent compared to 2022, which contributed to a 60 per cent fall in net income.
The lenders’ performance was held back by a “sharp decrease” in net interest income in its retail banking division as well as the “elevated cost” of integrating LeasePlan, a car leasing service acquired in May last year.
Revenue from retail banking continues to be impacted by “short-term hedges” that were taken out before interest rates started rising.
But the negative impact of these hedges was reached in the third quarter, the bank said, suggesting it had seen the “beginning of the rebound” in French retail banking
The bank announced a dividend of 90 cents per share as well as a €280m share buyback programme. Its shares were down 0.6 per cent.
Looking into 2024, the bank targeted revenue growth at or above five per cent against 2023 with a return on tangible equity of more than six per cent.
Slawomir Krupa, chief executive, said 2023 was “a year of transition and transformation”.
Krupa took over France’s third-biggest lender in May and disappointed investors with an underwhelming strategic plan, which forecast little growth in annual sales over the coming years.
“We are entering 2024 with confidence and determination, a year that will see the meticulous execution of our strategic plan and an unwavering commitment to reach our financial targets,” Krupa said.