Shares in Societe Generale, a French bank (OTC: SCGLY), saw a 7.1% decline during early trading on Monday. This drop followed the bank’s announcement of its strategic plan for the period up to 2026, which marks a departure from its previous five-year plan spanning from 2021 to 2025. The new strategic plan was presented by Slawomir Krupa, CEO of SoGen.
Societe Generale’s new strategic roadmap outlines an average annual revenue growth target ranging between 0% and 2% through 2026. It also aims to achieve a return on tangible equity (ROTE) between 9% and 10% in 2026 and a common equity Tier 1 (CET1) of 13%. These targets represent a shift from the bank’s previous five-year plan, which had set targets of at least 3% revenue growth, a 10% ROTE, and a CET1 ratio of 12%.
Analysts Flora Bocahut and Theo Massing from Jefferies expressed their disappointment with the bank’s revenue growth and ROTE targets. They also criticized the lack of detailed information in the strategic plan. The analysts noted that while Societe Generale is aiming for a higher CET1 ratio, it has not provided clear indications of how it plans to achieve this goal. Additionally, the bank’s plan to streamline its portfolio lacks explicit information regarding which business sectors might be affected.
Previously, Jefferies’ analysts had anticipated stronger revenue growth from Societe Generale starting in 2024 compared to other players in the sector. However, the new targets indicate an average revenue growth rate of only 1% through 2026, falling well below these expectations.
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