Key Takeaways
- Societe Generale aims for a return on tangible equity of 13% to 14% by 2029.
- The bank plans to reduce overall costs to below 16.3 billion euros by 2029.
- SocGen forecasts a cost-to-income ratio of below 55% by 2029.
Societe Generale, France’s second-biggest listed bank, has announced a new strategic plan that includes raising its profitability targets. The bank aims to achieve a return on tangible equity of between 13% and 14% by 2029, up from around 11% this year, which is significantly lower than its peers.
Under the new plan, SocGen also targets a cost-to-income ratio of below 55% by 2029, down from the current target of 60%. The bank plans to reduce overall costs to below 16.3 billion euros by 2029, a decrease of 2% compared to 2026 levels, through various measures including AI-related productivity gains and natural attrition.
SocGen’s CEO, Slawomir Krupa, who took the helm in 2023, is driving this turnaround. The bank has seen its performance rebound in the past two years, thanks to higher interest rates and cost-cutting efforts. Krupa stated, 'Today, we are entering a new phase. Our ambition is clear: to accelerate our profitable growth and maintain rigorous risk and cost discipline.'
The bank’s investment bank division has underperformed recently, posing a challenge for SocGen. However, SocGen remains optimistic about its ability to generate sustained growth, despite facing competition from digital lenders and US banks in its core markets.
SocGen’s payout policy to shareholders will remain unchanged, with the bank aiming to distribute 21 billion euros over a four-year period to 2029 if it meets its targets. The bank’s shares have nearly tripled since early 2025, outpacing the STOXX Europe 600 banks index, as investors welcome the focus on costs and capital.
Despite these positive signs, SocGen still faces the challenge of proving its ability to generate sustained growth. The bank is worth less than half of its French rival BNP Paribas and must continue to address its profitability issues, particularly in its investment banking division.
Krupa’s new strategic plan is seen as a significant step towards improving SocGen’s financial performance. The bank’s success will depend on its ability to execute these plans effectively and overcome the challenges it faces in the competitive banking landscape.
Today, we are entering a new phase. Our ambition is clear: to accelerate our profitable growth and maintain rigorous risk and cost discipline.
Slawomir Krupa, CEO of Societe Generale
