SOCIETE GENERALE

Analysis of Societe Generale share price

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Success of Société Générale's strategic plan with the public

10/05/2021 - 11h36

After the first quarter results, Societe Generale has just unveiled its longer term strategic plan, which allowed the stock to gain a few points this morning on the market. Explanations and details.

Elements that can influence the price of this asset:

Analysis N°1

As with all French and European banks, certain indicators will be monitored, such as Societe Generale's ability to meet the Basel 3 solvency ratio, which corresponds to 9% of shareholders' equity, as well as its control of its commitments in investment banking, centralisation of derivative compensation, cost of risk and return on equity or ROE.

Analysis N°2

Of course, the economic environment in which the banking group operates will have an impact on its profitability and all relevant economic data will be monitored.

Analysis N°3

In addition to this, important decisions and communications from the European Central Bank or ECB, which will of course have a direct influence on the price of this stock as well as on those of other European banks, will be closely monitored.

Analysis N°4

The development of the online bank Boursorama Banque, created and owned by Societe Generale, will also be an element to be followed with great interest. We therefore advise you to take a closer look at it.

Analysis N°5

Finally, we will of course keep an eye on the various major competitors of this banking company.

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General presentation of Societe Generale

The Societe Generale Group is one of the leaders in the French banking market. Its revenues are spread over several types of activities, the main one being, of course, retail banking in France and online banking with its subsidiary Boursorama, but also corporate and investment banking, international retail banking, insurance services and asset management.

The Societe Generale Group currently employs no less than 148,300 people in no less than 76 countries. The activities of this universal bank are divided into three main areas: the retail networks in France with Societe Generale, Crédit du Nord and Boursorama, the international retail networks with IBSF (International Banking Financial Services) and the corporate and investment bank (SG CIB) which manages Fixed Income, structured finance, debt, Forex and equity and advisory activities.

The group's two other business lines are specialised financial services and insurance and private banking, asset management and investor services.

Analysis of Societe Generale share price
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The major competitors of Societe Generale

Societe Generale is still one of the leaders in the international banking market. In particular, this bank supports one in three exporting companies and has a significant capacity to position itself as the main bank for its customers. It thus benefits from a good reputation since numerous studies have shown the quality of its transaction processing, its responsiveness and the efficiency of its customer service. However, European banks represent a competition that must be taken into account before starting to speculate on the Societe Generale share price and it is therefore essential to know the companies directly competing with it.

Here is the list of the main competitors of the Societe Generale:

Crédit Agricole

LCL


The major partners of Societe Generale

In the past, Societe Generale has also been able to position itself as one of the leaders in the banking sector through strategic partnerships and joint ventures. We therefore invite you to find out more about the various alliances set up by this group.

Crédit Agricole

Societe Generale has notably joined forces with Crédit Agricole to pool their asset management through a joint venture.

CapGemini

Societe Generale has also joined forces with BNP, Crédit Agricole and CapGemini to join Commerce One, an electronic marketplace for business-to-business purchasing.

Other partnerships

have been set up by Societe Generale but with smaller, unlisted companies, which we will therefore not discuss in more detail here.

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The factors in favour of a rise in the Societe Generale share price:

Knowing the ability of a company to face the future and to face any threats and opportunities that will present itself is undoubtedly essential to study the price of its stock on the stock market. We therefore suggest that you take the time to discover in a little more detail the strengths and weaknesses of the Societe Generale group, in other words, the advantages and disadvantages of its stock market share.

Let's begin this comparative analysis by taking a closer look at the main assets available to the Société Générale group which are all elements likely to support this share in the years to come.

  • First, of course, the positioning of the Societe Generale group in its sector of activity is appreciated. This banking group is none other than the market leader in financial services on the European scale. But that's not all. This French company is also positioned very positively as an asset manager because it is currently number four in this sector with 284 billion euros managed. Likewise, with regard to the asset custody segment, Société Générale owns and operates nearly € 1,165 billion and is also in fourth position.
  • Another strong point of the Societe Generale group, which supports the positive development of its stock market share, involves the profits made by this group in recent years. If we exclude the results of the year 2019 which penalized the banking sector a lot, the group has achieved profits that have increased almost constantly for several years. Bear in mind that the group benefits from a quality strategy with regard to the system of provisions against risks. By having sufficiently provisioned during the most prosperous years, the Societe Generale group has been able to protect itself against risks and is therefore more resistant to crises than most of its competitors.
  • Remaining on the strengths of the Societe Generale group, you'll find the development of equity derivative flows activities by this bank as well as the strong development of its structured products and bond distribution.
  • The group is also pursuing an extremely effective development strategy. Thanks to this strategy, the Societe Generale group has been able to conquer new markets and new customers. This particularly concerns the European banking sector in which it has developed strongly for years, but also the international market in which the group continues to develop. The Societe Generale group has also been able to strengthen its presence with financial institutions for a few years now. Also bear in mind that it has largely developed its private banking activities in most European countries. Regarding the rest of the world, it also targeted the markets of Africa and Europe.
  • The Société Générale banking group is also recognized for the quality of its strategic investments. It's important to point out its recent investments in the financing of natural resources which have brought it significant gains and an increase in its growth capacity.
  • The different types of clients that this group has is also an asset of the company. This includes the activities related to large customers and investors that Societe Generale is developing worldwide. The values advocated and followed by the company for a long time allow it to actively retain this clientele with customer satisfaction, quality of service or even innovation and added value. The group's strategy by customer segment and which differentiates individual customers from professional customers is also an integral part of the group's success. This allows it to offer products and services perfectly suited to the needs of each of these customers.
  • Finally, the last advantage of the Societe Generale group is undoubtedly its ability to conduct an effective multi-brand strategy which makes it a multi-channel relational bank thanks to its subsidiaries such as Crédit du Nord or its bank and online broker Boursorama.
The factors in favour of a drop in the Societe Generale share price:

After having toured the main advantages of the Societe Generale group and therefore its strengths for its growth and future development, check out what its main weaknesses are and therefore the disadvantages of its stock market value:

  • First of all, we see that the profitability of this company is relatively low compared to the competition, which penalizes it in terms of investment flows as well.
  • French legislation, which is particularly strict with regard to banking activities, is also penalizing for the activities of this group and may also represent an obstacle on its future growth.
  • The sheer size of the Societe Generale group can be seen as a problem. In fact, this banking company is not small enough to be operational, but it is also not large enough to be part of the largest investment banks in the world.
  • Finally, Société Générale's fourth and last major weakness is obviously the strength and presence of its main competitors on the market, which are large in size and strong internationalization. Its biggest current competitor is the BNP Paribas group, which operates mainly in France but also in the rest of the world.

The analysis of these current strengths and weaknesses of Societe Generale should be rechecked whenever needed as these elements may change over time. You will then be able to compare these elements with the threats and opportunities that will present themselves to the group in the years to come and which could influence the evolution of its share price to a greater or lesser extent.

The information supplied here is only for indicative purposes and should not be used without the completion of a comprehensive and complete fundamental analysis of this asset notably taking into account exterior data, future publications and announcements and all fundamental events and news that could influence the strengths and weaknesses or make them more or less significant. This information does not in any way constitute recommendations relating to the completion of transactions.

Frequently Asked Questions

Are Societe Generale shares listed on indices other than the CAC 40?

While Societe Generale is part of the CAC 40 stock market index, it also includes other benchmark stock market indices. Its capitalisation is also included in the calculation of the CAC All Shares, CAC All-Tradable, CAC Large 60, Euro Stoxx 50, Euronext 100, Euronext CDP Environnement France EW, Euronext CDP Environnement France Ex Oil, PEA and Stoxx France 50 indices. The price of this share is, of course, listed on compartment A of the Euronext Paris stock exchange.

What are the latest results published by Societe Generale?

Societe Generale recently published its financial results for the financial year 2019. The group's result was €3,946 million over this period, with a PER of €3.40 and a dividend of €2.20, the payment of which has however been cancelled for 2020 due to the market disruption caused by the Covid-19 pandemic. The yield per share for the year 2019 was €4.10.

What are the outstanding deposits and loans managed by Societe Generale?

Currently, in 2020 and based on figures published at the end of 2019, the Societe Generale banking group manages nearly €418.6 billion in outstanding deposits and €450.2 billion in outstanding loans. These data are of course important for your fundamental analyses of this value as they provide indications of the risk incurred by this bank.

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