By
Bhushan Akolkar
December 13th, 2023
The earnings report for French banking powerhouse Societe Generale for 2021 represents its best performance so far.
French banking giant Societe Generale SA (EPA: GLE) recently pulled in its best annual performance ever, exceeding analysts’ expectations. In its 2021 full-year financial report, which also holds its highest ever profit, SocGen posted a net income of 5.64 billion euros, or $6.44 billion. According to Refinitiv, the consensus estimate for the same period was 4.4 billion euros.
Societe Generale posted a net income of 1.79 billion euros in the final three months of 2021. This figure also surpassed the 1.3 billion euros expected by analysts. Also, for the fourth quarter, SocGen’s expenses rose by 4.9% from a year ago, while its CET 1 ratio increased to 13.7%. CET 1 ratio is a measure of a bank’s solvency. The bank’s position shows a significant improvement from previous losses.
Societe Generale chief executive officer Frederic Oudea weighed in on the bank’s rousing performance, saying:
“2021 marks a milestone for the Societe Generale Group, which achieved the best financial results in its history, enabling it to generate a good level of profitability and offer its shareholders an attractive return.”
Several Banking Divisions within Societe Generale Helped the Banking Giant Achieve its Best Annual Performance Till Date
SocGen’s robust end-of-year balance sheet was characterized by an impressive loan portfolio as well as high capital ratios. Furthermore, the French banking giant was also able to advance further during that period on some of its major projects. These include the merger of the two retail banking networks Societe Generale and Crédit du Nord. As a result of this and many other accomplishments, Oudea expressed optimism at what lay ahead for SocGen. As he put it:
“The Group is therefore entering 2022 with confidence, with the priority objective of the disciplined execution of this high value-creating roadmap and the finalization of its outlines by accelerating the transformations around ESG issues and new technologies.”
SocGen’s financial results also got a major helping hand from its global banking and investor solutions division. This saw an increase in net banking income of 25.2% from the previous year. In addition, the French multinational investment bank also pointed out that it realized revenue of 3.15 million euros in 2021. This was a substantial improvement from the 1.275 million euros it made in 2020. According to SocGen, “Equity activity enjoyed its best year since 2009.”
In addition, there was also a 6.1% revenue increase in SocGen’s asset and wealth management divisions. However, the bank’s revenue from fixed income and currency activities declined by 19.2% from the previous year. Despite this, the positive results from parts of SocGen’s other global banking division were enough to offset that perceived setback.
Societe Generale is planning to buy back company shares for a total amount of 915 million euros. In addition, the banking powerhouse is also proposing to pay a dividend of 1.65 euros per share. SocGen shares are currently up by approximately 100% over the past 12 months.