(BFM Stock Exchange) – The Defense Bank has exceeded expectations almost everywhere in the fourth quarter, with in particular a significant recovery in net revenues of interest in the retail bank in France. The group has enhanced its distribution rate and has announced share buybacks higher than expectations.

For years, Société Générale has failed to seduce investors. The arrival at the controllers of Slawomir Krupa, successor to Frédéric Oudéa, in May 2023, was to remedy it. And awaken a depressed valuation, among the weakest if not the lowest among European banks.

The beginnings of the Managing Director were difficult. Slawomir Krupa had notably frozen the market in September 2023, by delivering lower -term objectives to expectations during an investor day. The title had dropped by 12%.

The situation is now in the process of reverse. Société Générale had already delivered a very encouraging publication for the third quarter last fall.

The Defense Bank transformed the test this Thursday, February 6 with its accounts of the fourth quarter. The establishment delivered an almost perfect copy, showing both good trends in its market activities and, above all, in the retail banking in France.

The action takes off on the Paris Stock Exchange, the title Société Générale taking 9.2% around 11:10 a.m. and by far signing the highest increase in CAC 40.

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Dynamic BFI

Over the past three months of the year, Société Générale has released a net profit of 1.04 billion euros, 2.5 times more than over the same period of 2023. This net profit is clear above Expectations, which were located at 814 million euros, according to a consensus quoted by Royal Bank of America.

The bank net product (revenues) of the bank increased by 12.5% ​​to 6.621 billion euros, 3% above expectations, when management fees fell from 0.7% to 4.6 billion euros, an amount online with consensus. These costs have been hampered by the savings measures implemented by the company.

This positive chisel effect allowed the gross operating result to jump from 61.3% to 2.026 billion euros, against 1.81 billion euros expected by analysts.

“Société Générale has delivered a good series of results,” said Royal Bank of Canada, while UBS greets “robust figures”.

All divisions (except international retail banking) have exceeded expectations. As with its counterparts, BNP Paribas and Crédit Agricole SA, the Financing and Investment Bank (BFI), called “Bank of large customers and investor solutions” at Société Générale, has experienced a solid activity.

The net banking product of this division increased by 11.6% to 2.46 billion euros while net profit increased by 33%. These two lines of accounts exceeded 8% and 28% consensus respectively.

The retail bank in France confirms its best health

Market activities have been dynamic. The equity professions We saw their income increase by 10% over one year to 831 million euros while the professions of fixed rate products (bonds, changes, raw materials) increased by 8.8%.

Very important point at Société Générale, which is more exposed to this division than its French consumers: the retail bank in France confirms its upturn.

In the fourth quarter, the net banking product in the “retail bank in France, private banking and insurance” climbed 15.5% to 2.27 billion euros, or 1% above expectations, while Its profit has multiplied by four to 360 million, against a consensus at 269 million euros.

The results of the retail bank in France were supported by a leap of 36% of the clear margin of interest, that is to say the difference between the interests perceived on credits and the remuneration of deposits, at 1.094 billion euros.

From one quarter to another, the clear margin of interest increased by 3%. This sends “a very useful signal for investors after a series of disappointments in the first half of the year 2024 and weaker figures from local competitors”, appreciates UBS.

In terms of solvency, this ratio this 1 ratio, which reports capital to the weighted outstanding risk, registered at 13.3% at the end of 2024 against a consensus housed at 13.2%.

Improvement of return to the shareholder

Regarding its prospects, Société Générale said it targeted in 2025 income growth by more than 3%, a drop in management fees of more than 1% and a this 1 ratio greater than 13% throughout the year.

The company also plans to lower its operating coefficient (the charges reported to the net banking product) below the 66%mark, after 69%in 2024 and reach a tangible equity yield (ROTE) by more than 8%. According to Royal Bank of Canada, consensus was 7.6% for the latter target.

Last point, which particularly attracted the eye of analysts: the return to the shareholder. Société Générale has significantly increased it compared to 2023. The company will return 1.74 billion cash to its shareholders in the form of share buybacks and dividends, 75% more than in 2023.

The company plans to acquire for 872 million euros from its own titles from February 10. The proposed dividend amounts to 1.09 euros per share. Which leads to a distribution rate of 50%.

Société Générale has, more generally, revised its return to the shareholder policy. The distribution rate will now be set at 50% against a previous range of 40% to 50%. In addition, the company announced that as soon as its ratio this 1 would exceed 13%, excess capital would either be returned to shareholders, or used for “profitable and disciplined growth” initiatives.

Jefferies describes these commitments as “important” as they should reassure a market which, historically, has a bad perception of the capital position of Société Générale.