By Pietro Lombardi
AFP via Getty Images
Societe Generale SA dropped its profitability target for this year, a day after peer BNP Paribas SA /zigman2/quotes/206351084/delayed FR:BNP +1.05% cut the same target, and said its fourth-quarter net profit fell.
France’s third-largest listed bank /zigman2/quotes/206663756/delayed FR:GLE +0.08% by assets said it now expects its return on tangible equity--a key measure of profitability--to improve this year. It had previously guided for a RoTE of between 9% and 10%, a fairly large jump from last year’s 6.2%.
Net profit for the quarter fell 4.6% on year to 654 million euros ($719.4 million), it said on Thursday.
Net banking income, the bank’s top-line revenue figure, rose 4.8% on year to EUR6.21 billion.
The bank expects higher profit this year compared with 2019, thanks to slightly higher revenue and lower operating expenses. It also targets a lower cost-income ratio. Its core Tier 1 ratio target remains at 12% and the lender said it “aims to steer above” that target.
SocGen will pay a cash dividend of EUR2.20 a share. It will shift to a new dividend policy, targeting a payout ratio of 50% of underlying net income. It could include a buyback component of up to 10%, with the dividend component paid in cash.
The bank’s core Tier 1 ratio, a key measure of capital strength, rose to 12.7% from 12.5% in September.