Finance
SocGen lifts profit target as retail bank offsets trading drop
Published by Global Banking & Finance Review®
Posted on February 6, 2026
3 min readLast updated: February 6, 2026
Quick Summary
SocGen raised its profit target for 2026, driven by retail banking growth that offset investment banking declines. The bank's net income rose 36% in Q4.
SocGen Raises Profit Goals as Retail Banking Balances Trading Decline
SocGen's Financial Performance Overview
By Mathieu Rosemain
Fourth-Quarter Profit Highlights
PARIS, Feb 6 (Reuters) - Societe Generale sailed past fourth-quarter profit forecasts on Friday after cost cuts and stronger retail sales offset a notable drop in revenue at its investment bank, and the French lender lifted a key profitability target for 2026.
Investment Banking Challenges
The lender's fourth-quarter group net income jumped 36% from a year earlier to 1.42 billion euros ($1.68 billion), 21% higher than the average estimate of 12 analysts compiled by the company.
Future Growth Projections
Revenue over the period rose 1.6% to 6.73 billion euros, above the average estimate of 6.65 billion euros. Operating expenses came in slightly lower than expected, France's second-biggest listed bank said.
SocGen under CEO Slawomir Krupa has sought to reverse years of underperformance by pursuing a twin strategy of reducing costs and strengthening the bank's core capital.
The approach has helped revive confidence at a time when foreign investors have become more selective about French lenders amid political instability and tax increases aimed at shoring up public finances.
SocGen's shares have risen about 140% over the past year, more than double the roughly 60% gain in the STOXX Europe 600 Banks index.
In a sign of confidence, the bank's board unanimously decided to renew Krupa's mandate as CEO for another four years beginning in 2027.
FICC REVENUE CONTRACTS SHARPLY
The bank lifted its 2026 target for return on tangible equity - a key profitability measure - to more than 10%, versus a previous range of 9% to 10%. The target is still lower than at rivals, including BNP's near 13%.
SocGen said it expected revenue growth of more than 2% in 2026 and a cost reduction of around 3%. It maintained a goal of a cost-to-income ratio below 60%, nearly five percentage points lower than it was in the fourth quarter.
But SocGen's investment banking division, its largest, saw sales decline - in contrast to gains at European and U.S. peers - by 2.3% to 2.41 billion euros, missing expectations. Fixed income, currencies and commodities (FICC) trading revenue dropped 13.3%.
The French lender also unveiled a new 1.46 billion euro share buyback programme, and said it would propose a total cash dividend of 1.61 euros per share in 2026.
($1 = 0.8477 euros)
(Reporting by Mathieu Rosemain; Editing by Tommy Reggiori Wilkes)
Key Takeaways
- •SocGen's net income rose 36% in Q4.
- •Retail banking growth offset investment banking decline.
- •2026 profit target increased to over 10% return on equity.
- •Shares rose 140% over the past year.
- •New share buyback and dividend announced.
Frequently Asked Questions about SocGen lifts profit target as retail bank offsets trading drop
1What is retail banking?
Retail banking refers to the services provided by banks to individual consumers, including savings accounts, personal loans, and mortgages.
2What is investment banking?
Investment banking involves financial services that help companies raise capital by underwriting and issuing securities, as well as providing advisory services for mergers and acquisitions.
3What is profitability?
Profitability is a measure of the financial success of a company, indicating how much profit it generates relative to its revenue.
4What is a share buyback?
A share buyback occurs when a company repurchases its own shares from the market, often to reduce the number of outstanding shares and increase shareholder value.
5What is net income?
Net income is the total profit of a company after all expenses, taxes, and costs have been deducted from total revenue.
