Paris, France – Société Générale, a multinational French bank, has been facing challenges with restructuring and turnaround plans for over a decade. The bank, commonly known as SocGen, has seen its shares drop nearly 40% compared to a 10% gain in the broader European bank group. Despite looking cheap by some metrics and showing signs of progress within its business units, SocGen has struggled to earn its cost of capital, leaving investors waiting for sustained progress.

In the first quarter, SocGen reported stable revenue and better-than-expected expense control, driving an improvement in adjusted pre-provision profits. However, these results were overshadowed by ongoing challenges in the French retail business, where revenue declined and missed expectations.

Management at SocGen has been actively selling off non-core assets to focus on generating double-digit returns on tangible equity. The recent sale of the equipment finance business and African operations indicate a strategic shift towards streamlining the bank’s operations. However, challenges remain in key areas where the bank needs sustained improvement.

Looking ahead, expectations for SocGen’s return on equity to support earnings growth may require more radical restructuring. With modest asset disposals, cost efficiency improvements, and gradual market growth, the bank aims to achieve a higher return on equity over the coming years.

Despite the uncertainties surrounding SocGen’s performance, investors see potential in a turnaround led by the bank’s new CEO and improving market conditions. With a focus on unlocking the value of its business and generating positive returns, SocGen continues to navigate a challenging financial landscape in search of sustainable growth.