Paris (AFP) - France's Societe Generale boosted its bottom line in 2018, but trimmed its profit target and announced plans to cut back its investment bank as the outlook for global finance remains topsy-turvy.
The 3.9 billion euros ($4.4 billion) in net profits was up 38 percent from 2017, but that was a year when Societe Generale booked considerable restructuring costs and legal settlements.
The result beat the expectations of analysts, who were expecting an average of 3.6 billion euros according to a survey by data firm Factset.
Net banking income, the equivalent to revenue for a bank, rose by 5.2 percent to 25.2 billion euros, in line with expectations.
But stripped of exceptional items, the net profit dipped by 0.5 percent, while net banking income edged 0.6 percent higher.
Chief executive Frederic Oudea warned of "an economic, financial and regulatory environment that looks set to be less favourable and even more complex over the next few years than anticipated a year ago" and announced the bank was scaling back its profit target and operations accordingly.
Societe Generale is now targeting a return on tangible equity (ROTE) of between 9 and 10 percent on the 2020 horizon, instead of the 11.5 percent it had pencilled in as part of its strategic plan unveiled in November 2017.
ROTE came in at 9.7 percent in 2018.
Societe Generale said it was adjusting the operations of its Global Banking and Investor Solutions unit to focus on its most profitable areas.
Some 8 billion euros in risk-weighted assets are to be sold off by 2020, reducing the weight of the unit by more than 10 percent.
The bank said it would seek to squeeze an additional 500 million in savings from the unit as well.
"Given a geopolitical environment marked by substantial uncertainty (and) a still low interest rate environment in the eurozone" Societe Generale said it was also revising down its interest rate assumptions in its forecasts.
It estimated would have an impact of around 500 million euros in group revenue in 2020.
