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French banking giant Societe Generale (OTC:) has unveiled a strategic plan for 2022 to 2026 that focuses on streamlining its portfolio and reducing its exposure to the oil and gas sector. Announced on Monday, the plan is expected to bolster the bank’s strength through a simplified business portfolio, according to Chief Executive Slawomir Krupa.
The bank’s new strategy includes a more modest target for average annual revenue growth, set between 0% and 2% over the 2022-26 period. This is a notable decrease from its previous targets for the 2021-25 period, during which the bank aimed for at least 3% growth annually.
Societe Generale also revealed plans to diversify its revenue streams, primarily through increased advisory services and growth in self-financed risk-weighted assets, as part of a disciplined capital strategy. The bank has set ambitious financial targets for 2026, aiming for a return on tangible equity between 9% and 10%, a cost-to-income ratio below 60%, and a common equity tier 1 ratio—a measure of financial strength—at 13%.
In line with global trends toward sustainability, Societe Generale is seeking an aggressive reduction in its upstream oil-and-gas exposure. By 2030, the bank aims to achieve an 80% reduction relative to its 2019 levels. This marks a significant increase from its earlier goal of a 20% reduction by 2025. The bank now aims to halve its exposure by this date.
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