Growing pains

8 February 2018 By Christopher Thompson Follow @CGAThompson

Tax reforms and other one-off costs dragged the French bank’s return on equity down to 4.9 percent last year. But even underlying expenses grew faster than core banking revenue. CEO Frédéric Oudéa needs revenue growth at home to have any hope of hitting ambitious 2020 targets.

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Société Générale on Feb 8. said net profit for 2017 fell by 28 percent to 2.8 billion euros while revenue declined 5 percent to 24 billion euros.

Operating expenses rose by 6.1 percent to 17.8 billion euros.

Adjusted for the impact of tax reforms in France and the United States and other items, underlying net profit rose 8 percent to 4.5 billion euros.

The French bank’s return on equity was 4.9 percent, down from 7.3 percent at the end of 2016.

The bank said its common equity Tier 1 capital ratio was 11.4 percent at the end of December, down 10 basis points over the year.

SocGen announced an annual dividend of 2.20 euros per share, unchanged from the prior year.

The bank’s Paris-listed shares were up 3.3 percent at 45.73 euros by 0900 GMT on Feb. 8.

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