Group net income rises 23% to a record 1.79 billion euros that reaches forecasts.

French bank Societe Generale (SocGen) posted record quarterly profit and upped its 2026 profitability target, as a recovery in retail banking and tight cost controls offset a third consecutive quarter of shrinking revenue at its trading arm.

Group net income rose to a forecast-beating 1.79 billion euros in the second quarter, up 23 per cent from a year earlier and reaching a record, ahead of the 1.57 billion euro average of 13 analyst estimates compiled by SocGen.

Revenues also came in ahead of expectations, up 4.5 per cent to 7.1 billion euros, with lower-than-anticipated costs.

France’s second-biggest listed lender by market valuation now expects a full-year return on tangible equity – a key measure of profitability – of around 11 per cent, up from a previous target of above 10 per cent.

SocGen, which delivers its next strategy update in September, also lifted its cost-cutting goal after the bank’s cost-to-income ratio came in below a full-year target of 60 per cent.

Chief executive officer Slawomir Krupa has embarked on one of Europe’s most closely watched banking turnarounds since he took the helm in May 2023.

After a rocky start, the efforts are paying off: SocGen’s share price more than tripled since he took over, outperforming the Euro Stoxx Banks Index, as investors cheer his focus on capital, costs and execution.

SocGen also announced a 1.5 billion euros extraordinary share buyback starting Aug 3, alongside an interim cash dividend of 0.75 euros per share, up 23 per cent from a year earlier.

The move follows analyst expectations that the bank would return part of its excess capital to shareholders after building a core capital ratio well above regulatory requirements, notably through asset sales.

After the buyback, SocGen’s core Common Equity Tier 1 capital ratio will stand at 13.2 per cent.