Even before heightened political uncertainty in France sparked new worry about its sovereign debt this summer, Societe Generale’s share price was struggling.
After becoming chief executive in May last year, Slawomir Krupa brought a reality check to SocGen in the form of a three-year plan unveiled last September. He raised the capital target to 13%, more in line with the sector, and promised to bring the efficiency ratio down to 60%. But it failed to inspire investors.
The rest of the sector is making well above Krupa’s 2026 return on tangible equity target of between 9% and 10%. In the 12 months following his arrival as CEO in the middle of last year, the sector has only extended its valuation lead over the French lender.
The inclusion of a zero in Krupa’s target for annual revenue growth (0% to 2% from 2022 to 2026) further stands out for its lack of optimism. It is hardly the sort of environment to fire up the mood of investment bankers.
In corporate and investment banking revenues, SocGen has fallen way behind French peer BNP Paribas over the past decade.
But the message from the two people Krupa chose last year to lead the wholesale division – Anne-Christine Champion and Alexandre Fleury – is that staff morale is strong, despite the backdrop in France.
