Societe Generale's Growth Plans To Include Further Job Cuts
Zacks Investment Research | Nov 27, 2017 08:54PM ET
According to Societe Generale (PA:SOGN) SA’s (OTC:SCGLY) strategic plan “Transform to Grow”, the company projects its earnings per share (EPS) to be up to nearly 6.50 euros by 2020. Moreover, the company expects revenues to increase at a CAGR of more than 3% in the five-year period (2016-2020).
The financial targets that have been set for 2020 also include keeping expenses less than equal to 17.8 billion euros.
These goals are centred on achieving superior and sustainable growth. In order to fulfil these objectives and restore profitability, the company needs to transform all of its businesses and services. For this, it recently announced plans to reorganise its French network.
The company is likely to cut as many as 900 jobs in its French consumer bank. This job cut is in addition to the previously announced cuts of nearly 2,550 employees in 2016.
In addition, as part of the transformation plan, the company will likely reduce its branch networks from 2000 to 1700 branches between 2017 and 2020.
Notably, in order to implement the reorganisation and move ahead with the transformation plan, with primary focus on the French retail banking division, the company anticipates to record an exceptional charge of around 400 million euros in fourth-quarter 2017.
After taking into consideration the impact of all the tax changes, the company will likely record an additional charge of nearly 170 million euros in the quarter.
In order to achieve the targets, the company needs to maintain strict discipline regarding its risk management.
In the past year, shares of the company have gained 20.9%, underperforming 22.5% growth recorded by the Zacks Investment Research
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