By Adria Calatayud

Societe Generale shares climbed after the bank posted fourth-quarter results that beat analysts' expectations, boosted payouts to shareholders and targeted revenue growth and higher profitability for the year ahead.

The French lender benefited from a continued recovery in its domestic retail-banking operations, strong activity across trading desks and cost controls, which helped it report a net profit that was sharply higher than in the year-earlier period.

The results sent Societe Generale's shares up as much as 11% on Thursday, returning to levels last seen in 2022.

The bank has sold some assets it deemed as noncore in a bid to simplify its operations and strengthen its balance sheet since Slawomir Krupa was appointed as chief executive in 2023. Some analysts have said recent results suggest the turnaround strategy is starting to pay off.

Societe Generale reported a quarterly net profit of 1.04 billion euros, equivalent to $1.08 billion, compared with 429 million euros a year earlier.

Net banking income climbed 11% to 6.62 billion euros. The increase was mainly driven by Societe Generale's French banking operations and by its global banking-and-investor solutions segment.

Analysts had expected Societe Generale to post a net profit of 820.8 million euros on revenue of 6.41 billion euros, according to consensus estimates compiled by Visible Alpha.

"In 2024, our performance improves materially. All our targets are exceeded and ahead of plan," Krupa said.

Societe Generale said it plans to increase its payout ratio to half of its net profit going forward, up from its previous policy of between 40% and 50%. It also aims to distribute to shareholders any excess capital above its targeted level.

The lender said it is launching a share buyback program of 872 million euros and proposed a dividend of 1.09 euros a share, up from the 0.90 euros a share it paid a year ago. The buyback has received European Central Bank approval and is due to start on Feb. 10, it said.

For 2025, the bank expects revenue growth of more than 3% and a decline in costs above 1%. Return on tangible equity--a key profitability metric--is forecast to exceed 8%, rising from 6.9% in 2024, Societe Generale said. The bank also reiterated targets for 2026.

The bank's better-than-expected results and 2025 guidance should increase confidence that its 2026 targets are in reach, RBC Capital Markets' Anke Reingen and Matthew Russell wrote in a note to clients.

Write to Adria Calatayud at adria.calatayud@wsj.com

(END) Dow Jones Newswires

February 06, 2025 07:35 ET (12:35 GMT)

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