Societe Generale shares climb after cost-cutting plan

Paris (AFP) –


Shares in Societe Generale climbed Tuesday after the French bank unveiled a strategic plan that will see it shutter 15 percent of its branches in its home market and cut even more jobs.

While the plan aims to boost profits, in the short term France's third-largest bank will need to book a charge of 400 million euros ($476 million) to implement the restructuring.

It announced it will also book against fourth quarter earnings 170 million euros for an exception tax levied by the French government.

Societe Generale's shares rose 0.8 percent in early trading, while the Paris CAC 40 index edged 0.05 percent higher.

The strategic plan through 2020 unveiled late Monday aims to make 1.1 billion euros in overall savings, while at the same achieving an increase in revenue of 3 percent per year.

It targets raising its net profit per share to 6.5 euros in 2020, compared to 4.3 euros in 2016.

Societe Generale's chief executive Frederic Oudea said the bank aims to remain a trusted partner to clients and is committed to a positive transformation of societies and economies.

"Our ambition is therefore to generate superior, profitable and sustainable growth," he said in a statement.

The bank announced that will see it close 300 of its branches in France, and cut an additional 900 jobs on top of the 2,500 announced since the beginning of 2016.

With ultra low interest rates set to continue in Europe, Societe Generale expects growth of more than one percent in France.

However it is targeting more than five percent growth in its businesses outside France. In particular it aims to become the top foreign bank in Russia.