Société Générale’s Strategic Turnaround: ESG, Cost Cuts & Core Business Growth

Société Générale is executing a strategic transformation under CEO Slawomir Krupa centered on three pillars: simplification, sustainability, and profitability. The recent update to its “Services and Solutions” framework clarifies its operational structure: three complementary business lines, each embedding ESG considerations. This aligns with wider European banking trends of increasing regulatory attention to sustainability and rising investor demand for responsible finance [1][6].

The financial metrics are tangible indicators that the transformation is producing results. Net income in Q3 2025 rose 11% year-over-year to €1.52 billion, exceeding analyst expectations [3]. GBIS, Societe Generale’s investment banking and capital markets arm, saw divergent performance: fixed income, currency, and credit trading improved, while equity-related revenue declined—highlighting sectoral risk exposure and market sensitivity [3]. Meanwhile, the French retail business saw a sharp rebound in mortgage lending (+74%), suggesting consumer financing is recovering in a high-rate environment [3].

To support this turnaround, Krupa has overseen intense cost-cutting—including organisational simplification, divestiture of non-core units, and scaling back branch networks—with SocGen targeting a cost/income ratio under 60% by 2026 (IT, external consultants, real estate among cost levers). As part of this, the bank agreed to sell its professional equipment finance business for €1.1 billion, excluding Czech and Slovak operations, expected to boost CET1 capital by ~25 basis points [7][12][16].

In the insurance segment, Societe Generale Assurances has delivered record results in 2024: premiums up 37% year-over-year to €20.3 billion, “unit-linked” products representing ~40% of savings outstandings, and improvements in Profitability (RONE) to 22% [6]. This underscores how the Insurance and Private Banking lines are becoming incremental profit engines, especially with digital and sustainable product expansion.

Strategic implications include a bank better positioned to withstand regulatory changes like Basel IV, rising capital costs, and ESG-driven regulation. However, challenges remain: restoring equity markets revenue, managing the political and macroeconomic risks tied to France, maintaining momentum in high-cost reduction targets, and ensuring digital banking growth (BoursoBank) continues amid competition [3][1]. Performance is gaining credibility, but risk exposure and execution discipline will determine whether targets are sustainable.