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Societe Generale Outlines Plan to Return Over €21 Billion to Shareholders by 2029
Summary
The French banking giant announced a new strategic plan that includes returning more than €21 billion to shareholders through 2029, alongside new profitability and cost-cutting targets.
Societe Generale SA (EPA:SOGN) on Monday unveiled a strategic plan to return more than €21 billion to its shareholders between 2026 and 2029. The capital return strategy is based on a combination of ordinary profit distributions and the payout of excess capital, the French bank announced.
Shareholder Payout Strategy
The bank's plan involves a payout ratio of 50% of net income, which is expected to generate ordinary distributions exceeding €13 billion over the four-year period. These payouts will be split evenly between cash dividends and share buybacks. Societe Generale projects that its dividend per share will increase by a low-to-mid teens percentage annually.
In addition to ordinary distributions, the bank plans to return approximately €8 billion in capital that exceeds its target Common Equity Tier 1 (CET1) ratio of 13%. This figure includes an extraordinary distribution of €1.5 billion that was previously announced on July 30.
New Financial and Efficiency Targets
AdAlongside the capital return plan, Societe Generale set new financial goals for 2029, aiming for a return on tangible equity (ROTE) of 13%-14% and a cost-to-income ratio below 55%. The bank targets a ROTE of over 15% from 2030 onwards.
To achieve these targets, the company plans to reduce its cost base by about 2% from its 2026 estimate to below €16.3 billion by 2029, a net reduction of approximately €300 million. This will be driven by gross savings of about €1.9 billion, which are intended to offset inflation and new investments. The bank expects AI initiatives to generate €500 million to €600 million in savings and has signed an agreement with Anthropic to accelerate AI adoption.
Growth and Risk Outlook
The bank is targeting average annual revenue growth of about 3% between 2026 and 2029. It also projects an average annual growth in risk-weighted assets of about 2%, or approximately €25 billion over the period. The net cost of risk is expected to be between 25 and 30 basis points.
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