Société Générale falls 9% on the stock market after revising its revenue estimate downwards

Date: September 18, 2023 Time: 16:57:18

The French bank Société Générale becomes the ‘red lantern’ of the French Cac 40 after presenting its new strategic plan for the horizon of 2026, which does not seem to have convinced investors. The bank’s shares are trading slightly above 24 euros in the mid-session when on Friday they had closed at 26.47 euros. Income expectations, the profitability objective and the lack of details on the sale of assets weigh down the bank’s price and lead it to suffer its biggest setback since mid-March, in the midst of a financial crisis due to the fall of several regional banks. . in the US and the forced sale of Credit Suisse to UBS to avoid bankruptcy.

The market has poorly digested the financial institution’s new roadmap, which contemplates the distribution to shareholders of between 40% and 50% of the net profit published from 2023 (in 2022 it had a profit of 1,825 million euros) below what analysts expected. Likewise, it also anticipates an annual growth in its income of between 0 and 2% on average in the period 2022-2026, compared to the 3% initially planned, with a maximum quality capital ratio (CET 1) of 13%. . in 2026.

In a statement, the CEO, Sklawomir Krupa, anticipates his willingness to design “a simplified business model”, and to take “the necessary decisions to reinforce capital and gain flexibility, structurally improve our operational efficiency and maintain our demanding management.” “. e of risks at the best level.” “Our ambition – according to Krupa – is to be a robust and sustainable leading European bank” based on “long-term relationships with clients, talented and committed teams, innovative strong added value and pioneering leadership in the “field of social and environmental governance”.

Regarding this last aspect, Société Générale is going to accelerate the process of abandoning investments in hydrocarbons. Its new objective is to reduce exposure to oil and gas production by 80% in 2030 compared to 2019, with an intermediate stage of a 50% drop in 2025. The entity highlights that it has achieved the 20% reduction in advance. which had been scheduled for 2025 and which has also “extensively” executed its exit from the thermal coal sector.

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