SocGen's retail revival aids Q1 profit as trading revenue slides
Societe Generale Q1 2024 Earnings Overview
By Mathieu Rosemain
Retail Division Drives Profit Growth
PARIS, April 30 (Reuters) - Societe Generale's first‑quarter earnings beat expectations on Thursday as cost cuts and a recovery in the French bank’s retail division more than offset a sharp contraction in sales at its fixed income trading business.
Group net income during the January‑to‑March period rose 5.5% from a year earlier to 1.70 billion euros ($1.99 billion), comfortably above the 1.55 billion‑euro average of 13 analyst estimates compiled by the company.
Cost Cuts and Improved Profitability
Earnings were driven by a steep fall in operating expenses, which declined at roughly twice the targeted annual pace of 3% during the period.
Stable revenues combined with lower costs lifted the bank’s return on tangible equity (ROTE), a key profitability measure, to 11.7%, well above its full‑year target of more than 10% but still below that of many rivals.
French Retail Unit Performance
SocGen's French retail unit delivered double‑digit growth in net interest income - what a bank earns on loans minus what it pays on deposits - helped by the cut in the remuneration rate on France’s flagship regulated savings account, the Livret A, a stabilising deposit mix and stronger lending volumes.
Leadership and Strategic Focus
The recovery of the French division is a key priority for Chief Executive Slawomir Krupa, who took direct oversight of the business after a miscalculated interest‑rate hedging policy cost the unit more than 2 billion euros and weighed heavily on earnings.
Since taking the reins in 2023, Krupa has pursued a strategy centered on asset disposals, cost cuts and tighter capital discipline. Improved execution has helped turn SocGen shares into one of the best‑performing European bank stocks over the past year.
FICC Trading Suffers Sharp Contraction
FICC TRADING SUFFERS SHARP CONTRACTION
By contrast, SocGen’s investment banking division — the bank’s largest — saw revenues decline by 4.9%, dragged down by an 18% slump in fixed income, currency and commodity (FICC) trading, missing expectations even as Iran war-related volatility boosted activity at rivals.
The bank cited a "less favourable commercial momentum" and market "conditions in rates, particularly in Europe."
Comparison with Competitors
SocGen fell far short of peers: JPMorgan’s FICC revenue rose 21% in the quarter, while Goldman Sachs fell 10%, Deutsche Bank slipped 1%, and BNP Paribas reported broadly flat revenues.
Looking Ahead: Strategic Plans and Digital Banking
With some of its key 2026 targets already within reach, SocGen still needs to bring its cost‑to‑income ratio below 60%.
Investors are already looking ahead to the bank’s next mid‑term strategic plan, due on September 21.
BoursoBank's Future and Digital Competition
One open question is the future of the group’s digital unit, BoursoBank, which generated 92 million euros in profit in the first quarter and is targeting a positive contribution of more than 300 million euros for the full year.
BoursoBank’s path to profitability is likely to come under closer scrutiny as Revolut accelerates its expansion in France, intensifying competition in the digital banking segment.
Analyst Insights on BoursoBank
Jefferies analysts said BoursoBank materially scaled back promotional offers in the first quarter of 2026, signalling a clearer route to sustainable profitability.
($1 = 0.8559 euros)
(Reporting by Mathieu Rosemain; Editing by Tommy Reggiori Wilkes, Ingrid Melander)
