Societe Generale SA CEO Slawomir Krupa has unveiled a new strategic plan designed to enhance the French lender's profitability, cut costs, and increase investor payouts. The bank has raised its target for return on tangible equity (ROTE) to between 13% and 14% by 2029, a significant increase from around 11% this year, and aims for over 15% beyond 2030. This new target is intended to bring SocGen more in line with its peers, as the bank has historically struggled with higher costs and weaker profitability.
To achieve these ambitious targets, SocGen plans to reduce its overall cost base to below $17.6 billion (€16.3 billion) by 2029, representing a 2% decrease compared to 2026 levels. This will be accomplished through various measures, including a $430 million (€0.4 billion) reduction in procurement costs (excluding IT), a $540 million (€0.5 billion) decrease in IT spending, and productivity gains enabled by AI, as well as a reduction in staff through natural attrition. The bank is also targeting a cost-to-income ratio of below 55% by 2029, down from its current target of 60%, and forecasts average annual revenue growth of about 3%.
Under the new plan, Societe Generale has committed to substantial shareholder returns, potentially distributing over $24.1 billion (€21 billion) to investors through 2029. This includes an ordinary distribution of more than $14.9 billion (€13 billion) over the 2026-2029 period, split equally between cash dividends and share buybacks, with dividend per share expected to grow by a low-to-mid teens percentage annually. Additionally, up to $9.2 billion (€8 billion) in excess capital above a 13% CET1 ratio could be distributed. This strategy builds on Krupa's previous efforts, which have seen SocGen's shares nearly triple since early 2025, outperforming the STOXX Europe 600 banks index.
