Société Générale’s Q1 Earnings: Strong Growth Amid Volatility

Societe Generale ((SCGLY)) has held its Q1 earnings call. Read on for the main highlights of the call.

The recent earnings call for Société Générale painted a picture of robust performance in the first quarter, marked by significant revenue growth and cost reductions, alongside a solid capital position. Despite these positive developments, there were underlying concerns about market volatility and macroeconomic uncertainties that could impact future performance. While the trajectory appears positive, these potential risks cannot be overlooked.

Strong Revenue Growth

Société Générale reported a remarkable 10% increase in revenues, excluding asset disposals, which far exceeded the full-year target of more than 3% growth. This strong revenue performance underscores the company’s ability to drive growth even in challenging market conditions.

Significant Cost Reduction

The company achieved a cost reduction of over 4%, resulting in a cost-to-income ratio of 65%. This is a notable improvement, surpassing the target of less than 66% by year-end and marking a 10 percentage point improvement compared to Q1 2024.

Improved ROTI

Return on Tangible Equity (ROTI) increased to 11%, which is well above the year-end guidance of more than 8%. This improvement highlights the company’s enhanced profitability and efficient use of capital.

Strong Capital Position

Société Générale’s CET1 ratio reached 13.4% following the implementation of Basel IV, surpassing the year-end target. This strong capital position provides a buffer against potential economic downturns.

French Retail Banking Improvement

The French retail banking division showed significant improvement with a cost-to-income ratio decreasing from 86% in Q1 2024 to 68% in Q1 2025. This was driven by a 16.5% increase in revenue and a 6.6% reduction in costs.

Global Markets and Investor Services Performance

The Global Markets and Investor Services division saw a 10% increase in total revenues from Q1 2024, with equities revenues rising by 22%, indicating strong performance in this sector.

Market Volatility Concerns

Despite the positive results, the company expressed concerns about potential global macroeconomic slowdown and prolonged market volatility, which could pose challenges to future performance.

Asset Quality Uncertainty

There remains uncertainty regarding the impact of tariffs and fiscal stimulus on asset quality. The company has taken a cautious approach, reflected in increased S1 provisions.

Limited Growth in Certain Areas

While overall performance was strong, some segments such as mobility, international retail, and financial services showed limited growth, with revenues increasing by only 0.8% excluding disposals.

Forward-Looking Guidance

In its forward-looking guidance, Société Générale expressed confidence in navigating potential macroeconomic challenges, thanks to its strong capital position, diversification, and robust risk management. The company maintained a strong liquidity profile, with LCR and NSFR ratios well above regulatory requirements, and reported solid performance across various divisions, including French retail, global banking, and investor solutions.

In conclusion, Société Générale’s earnings call highlighted a strong start to the year with impressive revenue growth and cost management. While the overall sentiment was positive, the company remains vigilant about potential risks from market volatility and macroeconomic uncertainties. Investors and stakeholders can take confidence in the company’s solid capital position and strategic focus on risk management.