Societe Generale, the French bank, has revealed its new strategic plan for the period from 2022 to 2026. With a focus on strengthening the group and streamlining its portfolio, the bank aims for slower average annual revenue growth compared to its previous targets.
Simplified Business Portfolio
The chief executive of Societe Generale, Slawomir Krupa, has emphasized the importance of a simplified business portfolio in the bank’s new strategy. Moving forward, the bank will concentrate on its core franchises.
Revised Revenue Growth Targets
In line with its strategic plan, Societe Generale is targeting average annual revenue growth between 0% and 2% for the period from 2022 to 2026. This marks a change from its previous objective of delivering at least 3% annual revenue growth between 2021 and 2025.
Differentiated Business Growth
SocGen expects its business segments to grow differently as a result of strict capital discipline. It anticipates increased advisory services and growth in self-financed risk-weighted assets as key drivers of growth.
Profitability and Financial Strength Goals
The bank has set ambitious targets for profitability and financial strength. It aims to achieve a return on tangible equity of between 9% and 10% and a cost-to-income ratio below 60% by 2026. Additionally, Societe Generale targets a common equity tier 1 ratio of 13% in the same year, demonstrating its commitment to maintaining financial robustness.
Reducing Oil-and-Gas Exposure
As part of its new strategy, Societe Generale plans to significantly reduce its exposure to the oil and gas sector. The bank aims for an 80% reduction in upstream oil-and-gas exposure by 2030 relative to 2019 levels, with a target of halving its exposure by 2025.