SocGen seals rebound with record year

Paris

SOCIETE Generale SA rebounded with a record annual profit from its first losing year in decades, as all main businesses at the French lender beat analysts' estimates in the fourth quarter.

A resurgent equities trading unit and record earnings from financing and advisory were among the highlights as revenue jumped 13 per cent in the final months of last year and net income almost quadrupled.

The Paris-based bank said half of last year's underlying profit, or 2.75 euros (S$4.20) a share, will be returned to investors through dividend payments and a share buyback.

The results complete a show of strength by chief executive officer Frederic Oudea, who has kept a tight grip on the bank after losses at the onset of the pandemic. He has reshuffled management, is merging the bank's domestic retail networks, bulking up the car-leasing business with the 4.9 billion euro acquisition of LeasePlan, and strengthening SocGen's digital banking arm Boursorama by taking over ING Groep NV's French retail clients. That's helped the shares more than triple from a low reached in September 2020, making it one of the best-performing bank stocks in Europe.

Revenue increased by more than 10 per cent in all main business units. In the investment bank, equities trading surged 23 per cent from a year earlier, beating the 0.5 per cent average gain among the biggest Wall Street banks and the 17 per cent increase at cross-town rival BNP Paribas SA. Fixed-income trading declined 9 per cent, worse than analysts had expected but better than at peers including BNP.

To reward employees for that performance, SocGen is increasing its bonus pool "massively" from last year, when its investment bankers saw a 20 per cent cut, Slawomir Krupa, who oversees that business, said in an interview on Thursday (Feb 10) with Bloomberg TV. He declined to say how much exactly variable compensation will rise.

SocGen maintained its payout ratio of 50 per cent of underlying profit. Oudea has said that the ratio could be considered a rule for the next three years. BLOOMBERG