Dow Jones Newswires: SocGen drops profitability target as net profit falls

Societe Generale SA dropped its profitability target for this year, a day after peer BNP Paribas SA BNP, +1.39% cut the same target, and said its fourth-quarter net profit fell.

France’s third-largest listed bank GLE, +0.45% by assets said it now expects its return on tangible equity–a key measure of profitability–to improve this year. It had previously guided for a RoTE of between 9% and 10%, a fairly large jump from last year’s 6.2%.

Net profit for the quarter fell 4.6% on year to 654 million euros ($719.4 million), it said on Thursday.

Net banking income, the bank’s top-line revenue figure, rose 4.8% on year to EUR6.21 billion.

The bank expects higher profit this year compared with 2019, thanks to slightly higher revenue and lower operating expenses. It also targets a lower cost-income ratio. Its core Tier 1 ratio target remains at 12% and the lender said it “aims to steer above” that target.

SocGen will pay a cash dividend of EUR2.20 a share. It will shift to a new dividend policy, targeting a payout ratio of 50% of underlying net income. It could include a buyback component of up to 10%, with the dividend component paid in cash.

The bank’s core Tier 1 ratio, a key measure of capital strength, rose to 12.7% from 12.5% in September.