Societe Generale ups profit target, pledges €21bn in shareholder payouts

(Sharecast News) - Shares in Société Générale rose on Monday after the French lender unveiled higher profitability targets and said shareholder distributions could exceed �21bn over the next four years.

At its Capital Markets Day, SocGen said it was targeting a return on tangible equity of 13% to 14% in 2029, rising to more than 15% from 2030 onwards. That compares with a 2026 target of above 10%, which itself had been raised from the 9-10% goal set out in its previous strategic plan.

The bank also outlined plans for substantial shareholder returns. Ordinary distribution - which payout of 50% of reported net income, split between cash dividends and share buybacks - are expected to exceed �13bn between 2026 and 2029, while dividend per share is targeted to grow at a low-to-mid teens annual rate over the period.

SocGen said it could also return up to �8bn of excess capital above a 13% CET1 ratio, taking potential total distributions above �21bn in total.

Chief executive Slawomir Krupa said: "Our ambition is clear: to accelerate our profitable growth and maintain rigorous risk and cost discipline."

Under the new plan, revenues are expected to grow by around 3% a year between 2026 and 2029, while the cost-to-income ratio is targeted to fall below 55%.

SocGen is aiming to reduce its cost base by around 2% from estimated 2026 levels to below �16.3bn in 2029, supported by �1.9bn of gross savings. Measures include lower procurement and IT spending, productivity gains from AI and a reduction in employee numbers through natural attrition.

The bank said AI initiatives could generate between �500m and �600m of savings, while it also plans to focus investment on higher-return businesses including BoursoBank, wealth and savings, selected investment-banking activities, Eastern Europe and vehicle-leasing business Ayvens.

At 1323 BST, the shares were up 3.1% at �74.83 in Paris.