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Investing.com -- Societe Generale (EPA:SOGN) shares popped more than 7% in early Thursday trading after the French bank raised its full-year profitability target and reported second-quarter earnings that topped expectations, helped by a sharp recovery in its French retail business.
The bank now aims for a return on tangible equity of around 9% in 2025, up from a previous goal of above 8%. It also lowered its cost-to-income ratio target for this year to below 65%, compared with a prior forecast of under 66%.
Second-quarter group net income rose 31% year-on-year to €1.45 billion, beating the €1.19 billion average estimate from 15 analysts surveyed by the company. Revenue climbed 1.6% to €6.79 billion, also ahead of expectations.
The division housing SocGen’s core French retail operations doubled its net profit, supported by a 15% increase in net interest income (NII).
"We see confirmed growth in French retail including BoursoBank which has reached 8.0m customers and should be on-track to start dialing back customer acquisition costs in ’26," Jefferies analyst Joseph Dickerson said in a note.
The investment banking unit reported revenue in line with consensus. Fixed income and currency trading rose 7.3% to €615 million, while equities trading slipped 2.9% to €962 million.
The bank’s markets business saw less benefit from the recent volatility triggered by U.S. tariff moves than some of its global and domestic rivals.
"We remain fully focused on the precise and methodical execution of our 2026 roadmap to continue delivering sustainable and profitable growth for all our stakeholders," said CEO Slawomir Krupa, who was appointed to boost shareholder returns following a prolonged period of underperformance.
Societe Generale also unveiled a new €1 billion share buyback program, set to begin on August 4.