When Société Générale’s chief executive, Frédéric Oudea, spoke to Euromoney in early 2017, he rejoiced at how the European economy and regulation had turned “an inflection point”.
Almost a year later, speaking again to Euromoney, Oudéa says the environment has since “moved in an even better direction” – with upwards revisions to eurozone economic growth, the first signs of the ECB reducing bond purchases, an agreement on Basel III and the prospect of a more complete banking union.
“I have not changed my mind,” he says. “We are progressing from 10 years of remediation, to a better environment and more visibility. Beyond the geopolitical risks, banks will have greater capacity to focus on the transformation of their economies and societies.”
The market is clearly not fully convinced that SocGen can stage as much of an improvement to returns as these signs might suggest. By mid December, its share price was down about 6% year on year, compared with a rise of about 10% in the European banking sector.
Although investors in French banks welcomed a more favourable attitude to asset-backed financing in December’s Basel agreement, some analysts thought there would be less benefit to SocGen’s stock, due to its relatively low group capital buffer.