Societe Generale (SOGN.PA) shares fell more than 6% in early Monday trade after France’s third-largest bank indicated in a long-awaited strategic plan from its new CEO that it expects little to no growth in yearly sales in the next years.
Slawomir Krupa took CEO in May, tasked with resurrecting a bank that had fallen behind French leader BNP Paribas (BNPP.PA) and some other European rivals following a costly withdrawal from Russia last year and fears that it was overly reliant on volatile investment banking.
SocGen stated it would aim for a 9-10% return on tangible equity (ROTE) in 2026. It would also distribute 40-50% of reported net income to shareholders in dividends and buybacks beginning in 2024.
Both goals are slightly lower than prior pledges, which called for ROTE to be around 10% by 2025 and a payout ratio of 50%.
It also stated that its new targets are based on yearly revenue growth projections of 0% to 2% between 2022 and 2026.
Krupa, a SocGen veteran and former head of its investment bank, stated that he would reorganize the bank’s operations but provided no further details.
“We will strengthen the group by shaping a simplified business portfolio while taking the necessary actions to increase capital and flexibility, structurally improve our operating leverage, and maintain best-in-class risk management,” Krupa said. SocGen’s share price dropped, putting it on track for the greatest one-day decrease since March.
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