Société Générale will promote corporate banking after the negotiation

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Société Générale intends to focus its investment banking approach on corporate finance and advice as it seeks to move away from the types of trading risks that pushed the French lender to a loss for the first full year in decades.
The company said on Monday it would push for a “customer-oriented strategy” and focus capital on “financing, advisory and transactional banking” to reduce confidence in more volatile trade flows.
The commitment comes after the business of equity derivatives was pushed to SocGen, which has been the core of the bank’s identity for decades. loss last year after the pandemic forced companies to cancel dividend payments, breaking some holes structured products the bank sold them to customers.
As a result, SocGen reduced the level of risk taken by its capital division. It top level and an innovation that sacrificed 250 million euros in revenue that created new products, but the cost base should be reduced by 450 million euros by 2023.
This part of the business has achieved its best performance since 2015, giving it a boost SocGen’s earnings in the first quarter and relieving the pressure for deeper changes.
The lender will now try to “provide predictable performance” from its markets ’business, division chief Jean-François Grégoire told investors on Monday.
“Last year, due to the special distribution of the market, it led us to review the management of structural products that were clearly problematic in extreme market conditions,” Grégoir said. “We quickly decided to eliminate the risk.”
SocGen said Monday that the general business of banking and investor solutions (GBIS), which includes trade and investor financing, will now have a “normative equity” return – a measure of the bank’s adjusted returns – by more than 10 per cent by 2023, now around 7 per cent.
The bank aims to achieve an average growth of 3 per cent for financing and advisory businesses between 2020 and 2023, while the market business aims for “stability”.
SocGen aims to “normalize” GBIS revenue by around € 2023 million by 2023, while targeting a cost base of € 5.5 million to € 5.7 million by 2023. In 2020 it was around 5.8 million euros.
“After all, the full introduction of SocGen’s new goal would lead to a [roughly] 8 percent rises to the 2023 earnings consensus, ”Morgan Stanley analysts said.
Shares of SocGen rose nearly 3% in the afternoon when trading in Paris, and this year’s profits rose to almost 50%.
However, the bank’s share price of 25.64 euros is still below the point taken by CEO Frédéric Oudéa in 2008. Jerome Kerviel trafficking scandal.
Oudé’s term as CEO extends to 2023, and the renewal of the investment bank is part of a change in strategy that will be key to his legacy.
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