A year of “transition and transformation”. This is how Slawomir Krupa, the general director of Société Générale, describes 2023. The bank of which he has been the boss since May 2023 reported, this Thursday, February 8, in a press release of a sharp drop in its net profit in the fourth quarter. Over the last three months of the fiscal year, the net profit of the French bank group fell by 59.8% year-on-year, to stand at 430 million euros, a figure however above the 333 million euros expected.
This result therefore exceeds analysts’ expectations thanks in particular to the resumption of its retail banking activity in France. If the revenues of the retail banking division in France, private banking and insurance, fell by 14.3%, Société Générale nevertheless underlines in this press release that this fourth quarter was “nevertheless marked by the start of the rebound in the margin net interest rate”, in other words the difference between the interest rate at which banks lend and that at which they refinance.
The net banking income of the third French bank by market capitalization also fell by 9.9% in the fourth quarter, standing at 5.96 billion euros, a figure higher than the 5.86 billion euros expected. by analysts. Market activities for their part fell by 0.8%, indicates the bank, the good performance of equity activities having offset the 22.1% drop in rates, credit and foreign exchange activities.
Revenue growth of at least 5% in 2024?
“The change in trajectory of retail banking revenues in France is encouraging and it seems that Société Générale is accelerating its restructuring,” Royal Bank of Canada analysts point out in a note, as reported by Reuters. “We expect Societe Generale’s profitability to improve in the coming years, driven by cost synergies and the recovery of the net interest margin in retail banking in France and a less contribution to the Single Resolution Fund,” JPMorgan analysts say in a note, Reuters indicates.
For 2024, Société Générale expects revenue growth of at least 5%. “We are approaching the year 2024 with confidence and determination, that of meticulous execution of the roadmap and an unfailing commitment to achieving our financial objectives which notably involves increased operational efficiency,” declares Slawomir Krupa in the press release.
More than 900 positions eliminated
The banking group announced Monday February 5 the elimination of 947 positions at its headquarters, “without forced departures”, as part of a vast cost reduction plan launched by Slawomir Krupa. “The objective is to group and pool certain activities and functions, to remove hierarchical layers to simplify decision-making processes” and to “resize certain teams,” explained Société Générale in a press release.
These job cuts, which should concern around 5% of the head office workforce according to management, are part of a vast strategic plan including “gross cost savings of around 1.7 billion euros by 2026” compared to to 2022, launched in September 2023 by Slawomir Krupa.
The boss of Société Générale is seeking to relaunch the bank after around fifteen years of ups and downs under the leadership of Frédéric Oudéa. The group employs some 56,000 people in France, out of 117,500 worldwide, according to its latest reference document.