By Elena Vardon and Adria Calatayud

Societe Generale shares jumped after the French bank said its quarterly results confirmed a rebound in its domestic retail business and shook up its executive ranks.

The group named Banco de Sabadell's Leopoldo Alvear as its next chief financial officer, replacing Claire Dumas, as part of a broader management reshuffle.

The reorganization was announced alongside third-quarter results in which it posted a surge in net profit for the three months ended Sept. 30 to 1.37 billion euros ($1.48 billion) from 295 million euros in the same period last year.

This was driven by a 10.5% increase in revenue to 6.84 billion euros, particularly thanks to a rebound in net interest income--the difference between what it earns on loans and what it pays clients for deposits--in France. French net interest income rose to 1.06 billion euros from 893 million euros.

Analysts at Jefferies said this marked a turning point for a business that had been a source of concern for investors.

Societe Generale's shares led France's CAC 40 blue-chip index in midday trading, jumping around 9% higher to levels last seen in early June, before French President Emmanuel Macron's surprise announcement of a snap election rattled markets.

Revenue for the unit which houses its French retail, private banking and insurance activities rose 19% on year to 2.25 billion euros. The bank said this came amid a still muted loan environment and competitive deposit dynamics.

As part of the management revamp, the bank said Chief Executive Slawomir Krupa will now take supervision of the French retail arm after one of its two deputy chief executives, Philippe Aymerich, stepped down.

Elsewhere, the performance of the group's corporate and investment bank also contributed to the revenue beat and was consistent with that of peers. Revenue for the division was 2.42 billion euros, 5% higher than the same period the previous year on strength in its equities business as well as fixed income and currencies trading.

Investors were reassured on the improved French retail performance and welcomed changes in top management, both of which open up the prospect of a positive change in direction, according to RBC Capital Markets.

Krupa said the bank is on track to execute the strategic plan it outlined last September and confirmed its guidance for the current year. Societe Generale's common equity tier 1 ratio--a measure of financial strength--stood at 13.2% at the end of the September, in line with its target of over 13% for 2024.

Return on tangible equity--a key profitability metric--was 9.6% for the quarter, up from 7.4% the previous quarter.

Nevertheless, it remains to be seen whether the bank can deliver on its 2026 targets and investors will want evidence of a change of gear amid a challenging economic and political environment, analysts at Citi said.

Sabadell's Alvear, who spent the past four years as the Spanish lender's financial chief, will take on the role on Jan. 7. In a separate statement, Sabadell confirmed his departure and named Sergio Palavecino as his successor as the bank fends off a hostile takeover bid from peer BBVA.

Societe Generale also appointed new heads for its SG Retail Banking network in France and its private banking operations.

Write to Elena Vardon at elena.vardon@wsj.com and Adria Calatayud at adria.calatayud@wsj.com

(END) Dow Jones Newswires

October 31, 2024 07:41 ET (11:41 GMT)

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