by Mathieu Rosemain
LONDON (Reuters) – Societe Generale Chief Executive Slawomir Krupa pledged on Monday to cut costs to boost profits by 2026 amid stagnant revenues, as he is due to present in London on Monday its strategic plan for the next three years.
Slawomir Krupa, who took the reins of Société Générale last May following the 15-year mandate of Frédéric Oudéa, said he had the ambition to make the group a “robust and sustainable leading bank” after years poor performance.
The third French bank by market capitalization is therefore aiming for a return on tangible equity ratio (ROTE) of 9% to 10% in 2026, compared to 5.6% declared at the end of June, thanks to the improvement in its profitability and the reduction of its costs, the group said on Monday.
It is also targeting an operating coefficient of less than 60% in 2026, compared to 75% in the second quarter, with a gradual improvement from 2024.
“We will strengthen the group by shaping a simplified business model. We will take the necessary decisions to strengthen capital and gain flexibility, structurally improve our operational efficiency and maintain our demanding risk management at the best level,” declared Slawomir Krupa, in a communicated.
The red and black bank is also targeting a CET1 capital ratio – a key measure of financial strength – of 13% in 2026, almost on par with the 13.1% reported at the end of June, taking into account increased solvency requirements under the Basel IV rules which are due to come into force in early 2025.
The group also wants to reduce its exposure to the oil and gas production sector by 80% by 2030 compared to 2019.
The new targets are based on forecasts of annual revenue growth between 0% and 2% on average over the period 2022-2026.
The bank did not provide details on the potential sale of non-core assets, after Slawomir Krupa pledged last month to pursue “a policy of rigor on the business portfolio”.
The group announced in June that it had signed agreements for the sale of its subsidiaries in Congo, Equatorial Guinea, Mauritania and Chad, and said it was examining a fifth unit on the continent.
Sources close to the matter told Reuters that the group was open to the idea of selling its subsidiary specializing in sales and capital goods financing SGEF, which it considers non-essential.
The bank said its new strategy had led it to book write-downs for the remaining part of its African, Mediterranean and overseas operations, as well as its Equipment Finance division, totaling around 340 millions of euros.
(With the contribution of Tassilo Hummel; Diana Mandiá, edited by Blandine Hénault)
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