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SocGen; Uninspiring, Minor Credit Negative

FINANCIALS

SocGen (GLE FP) 4Q23 results which missed consensus marginally but did include a new buyback. Forward return targets are still below cost of capital, we feel, these look a minor credit negative.


  • Revenues were 10% lower y/y but only 1% below consensus, costs were +5% and credit losses fell, meaning net income only missed consensus by around 5%.
  • Key credit metrics: loan losses fell to 24bp (from 21bp in 3Q23) and NPLs rose 10bp (to 2.9%). CET1 was13.1% (down 20bp in the quarter) and total capital is 18.2% (from 18.6% at Sep-23).
  • The EUR0.90 dividend is below expectations of EUR1.09 but there is a new EUR280m buyback here, so a minor credit negative and the 2024 financial targets are indicative of the bank’s key issue; RoTE is targeted to be just 6% (which is, at least, better than the 4.2% reported for FY23).

Conf call is 1000 London time at https://edge.media-server.com/mmc/p/9w3tx6ko

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