French banking giant Societe Generale (SocGen) has unveiled an ambitious new strategic plan, significantly lifting its key 2029 performance target. The French lender is a major bank, offering a comprehensive suite of financial services. It now aims for a return on tangible equity (RoTE) of 13% to 14% by 2029, a notable increase from around 11% this year, which is currently below most peers. This marks the next phase of CEO Slawomir Krupa’s efforts to revitalise the bank, historically contending with a high cost base and lower returns. Following Monday’s announcement, SocGen’s shares climbed over 3% against a broader European banking index gain.
Aggressive cost-cutting initiatives are at the heart of the new strategy. CEO Slawomir Krupa, who assumed leadership in 2023, affirmed that lowering costs remains central to the bank’s vision. SocGen has pledged gross savings of €1.9 billion by 2029, targeting overall costs below €16.3 billion ($18.7 billion), a 2% reduction from 2026 levels. These savings are expected through reduced procurement, IT spending, AI-related productivity gains, and a smaller workforce. The bank also targets a cost-to-income ratio below 55% by 2029, an improvement from its current 60% objective. Analysts noted these targets were slightly ahead of expectations, particularly on costs.
Beyond cost efficiencies, the plan outlines growth avenues and addresses market dynamics. Despite recent challenges in its investment bank, SocGen forecasts global markets revenue between €6 billion and €6.5 billion by 2029. The bank also intends to expand its digital offering, BoursoBank, aiming for 14 million customers by 2029, up from 9 million today. Executives acknowledged rising French government bond yields but stated the bank is hedged two to three years out, mitigating immediate material impact. Shareholder payout policy remains unchanged, with potential to distribute €21 billion over a four-year period to 2029 if goals are met.
