(BFM Stock Exchange) – The Swiss establishment has returned to the purchase on the action of the Defense Bank. The results published last week made a more confident in its ability to tighten its costs and return capital to the shareholders.
In the midst of an avalanche of disappointments during the last wave of results, Société Générale was one of the rare sources of satisfaction within the CAC 40. The title of the Defense Bank had taken 6.9% in the wake of its publication, signing in the season the results the fourth best performance of the Paris index, according to a classification established by us.
Société Générale had delivered, last week, profits much above expectations in the second quarter, carried by the recovery of the retail banking in France and the good performance of its market activities.
The group had also noted its operating coefficient objectives (which reports the charges to the net banking product, the equivalent of turnover among banks) and profitability of its equity for 2025. Cherry on the cake: the establishment had announced that the European Central Bank had approved a program of buyout of its own shares per Société Générale up to 1 billion euros.
The bank had warned at the beginning of the year that it would redistribute to its carriers its excess capital from the moment when its ratio this 1 (which brings the equity to the weighted outstanding risk) would exceed 13%. In the first half, this ratio had reached 13.75% and Société Générale decided to return the excess of cash to its carriers with this program of share buybacks which will have an impact of 25 points (0.25 percentage point) on its ratio this 1.
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UBS BROQUET MOVER
The Immaculate Copy rendered by Société Générale reinforced the very largely positive opinions of analysts on the action of the bank.
“The results of the second quarter have been solid in all areas. The chisel effect (the fact that income has progressed more than costs, editor’s note) continues to be positive, which results in significant growth in profits and an upward revision of the objectives. Weighted assets according to the risks (RWA) remaining well mastered, the capital accumulates, which of actions.
“History (scholarship) of group A legs”, for its part appreciates Bank of America, also purchasing.
The publication of Société Générale even pushed UBS to return to the purchase on the title. This Tuesday, August 5, the Swiss establishment noted its opinion to “buy” against “neutral” previously, after having made the opposite way last May. The design office, in passing, enhanced its price target at 62 euros against 51 euros before. This grants a potential of just over 13% to the action during Monday closing.
At the Paris Stock Exchange, Société Générale took 1.3% around 3:30 p.m. on Tuesday following the change of UBS recommendation, which increases its rise over the highest 2025 to 104.4%, by far the stronger in CAC 40.
Stars that line up
UBS motivates its change of opinion by invoking different reasons. When it went to “neutral”, last May, the Swiss bank read a series of elements necessary for the action to continue to see its multiple scholarship holders appreciate.
According to her, Société Générale had to show a positive inflection in net interest income (money released by a bank on credits reduced to the remuneration of deposits) in France, that it is a certain robustness in its market activities, that its accounts illustrate the discipline of the group on its costs, and that the company redistributes capital via buyout. And, finally, that the boosting plans in the euro zone are sufficient to support the short -term economic activity.
“All these factors are now more certain, in our view, taking into account macroeconomic developments (higher rates curve, more tense labor markets, inflation superior to forecasts) and relative domestic political stability”, writes UBS.
In parallel, the Swiss establishment notes that Société Générale displays a “widespread outperformance in terms of costs, with a commitment to reach an operating coefficient of 55% in the medium term and” a better generation of capital than expected “.
The share buybacks of 1 billion euros announced when the results of the first half of 2025 are published, “in our opinion confirms the intention to give priority to capital distributions”, continues the establishment.
UBS thinks that Société Générale will hold its target of Rote (return to tangible capital, a measure of equity profitability) from 9% to 10% by 2026. The Swiss establishment saw the bank reach 10.8% in 2026, thanks to a marked resumption of the profits of the Detail Bank in France, carried both by the recovery of net income but also by improving the profitability of its bank. Boursobank.
Boursobank announced, last week, having reached the course of 8 million customers. The crossing of this threshold should lead Société Générale to change course on its online bank by going from an investment phase in the acquisition of customers to a phase of improving its profitability. This will be translated in particular by a drop in the cost of acquisition (via promotions for the opening of accounts for example) of customers.
UBS also believes that Société Générale can display a distribution ratio (the cash rendered to shareholders divided by the amount of equity) online or even above the sector average. Of a rate of 7% this year, the Swiss establishment thinks that the bank will increase to 9% in 2026 then 14% in 2027 and 2028, comparing with an average of 9% to 10% in the sector.
Julien Marion – © 2025 BFM Bourse
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