Societe Generale (SOGN.PA) has raised its key profitability target for 2026 after surpassing fourth-quarter profit expectations. The French lender benefited from successful cost-cutting measures and robust retail sales, which offset a dip in investment banking revenue. Fourth-quarter net income surged 36% year-on-year to 1.42 billion euros ($1.68 billion), exceeding analyst estimates by 21%. Revenue for the period increased by 1.6% to 6.73 billion euros, also surpassing forecasts, with operating expenses slightly lower than projected. Societe Generale is a French multinational investment bank and financial services company. It offers services including retail banking, corporate and investment banking, financial services, insurance, and asset management.
Analysts at the Royal Bank of Canada described the results as “mixed”, highlighting “good cost control” and improved performance in French retail banking. Citi noted that the group delivered “on balance a solid set of results.” Under CEO Slawomir Krupa, SocGen has focused on cost reductions and strengthening its capital position to reverse years of underperformance. This strategy has boosted confidence, particularly among foreign investors, amid concerns about political instability and tax increases in France. SocGen’s shares have risen approximately 140% in the past year, significantly outperforming the STOXX Europe 600 Banks index.
The bank’s board has unanimously agreed to extend Krupa’s tenure as CEO for another four years, commencing in 2027, signalling confidence in his leadership. SocGen has increased its 2026 target for return on tangible equity to over 10%, compared to the previous range of 9% to 10%. While this target is still below that of competitors like BNP Paribas (BNPP.PA), which aims for nearly 13%, it reflects positive momentum. SocGen anticipates revenue growth of more than 2% in 2026 and a cost reduction of around 3%.
Despite the positive overall results, SocGen’s investment banking division experienced a 2.3% decline in sales to 2.41 billion euros, contrasting with gains reported by European and U.S. peers. Fixed income, currencies, and commodities (FICC) trading revenue fell by 13.3%. In comparison, BNP Paribas reported a 0.8% increase in fourth-quarter FICC revenue, and Deutsche Bank saw a 7% rise. The bank also announced a 1.46 billion-euro share buyback and intends to propose a 1.61 euro per-share dividend in 2026.