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Société Générale’s chief executive has said “nothing is sacred” as he pledges to take an axe to the French lender’s stubbornly high cost base, including cutting IT spending and scaling back its use of external consultants.
Slawomir Krupa, who has led the country’s third-largest bank since 2023, said SocGen had “lower levels of efficiency” than rivals and “overspend”, and needed to bring costs down to a “much lower level”.
“Everything is under scrutiny to make sure we are better at managing the cost base . . . from consulting spend, to [other] external spend and internal organisation, we look at everything,” he said in an interview with the Financial Times.
“This is really granular work across the entire company: nothing is sacred, everything’s on the table so that we can operate the bank more efficiently,” he said of his ongoing plan launched in 2023 to revamp the French bank.
The comments come as Krupa grapples with a cost-to-income ratio that stood at 69 per cent at the end of 2024, a 5 percentage point decline on the previous year but still one of the highest levels among large European lenders.
Krupa, who has spent almost three decades at SocGen, is seeking to turn around a bank hit by several setbacks since the 2008 financial crisis, including a €4.9bn rogue trading scandal and a €3.3bn loss on its exit from Russia.
His strategic plan centres on strengthening the French lender’s capital reserves. The company has cut staff and sold off a series of businesses to reduce costs and boost capital, shedding its equipment leasing unit and private banking subsidiaries in the UK and Switzerland.
Krupa told the FT that the turnaround plan was producing “colossal” restructuring costs that came in at €613mn last year, which he said were “disappearing progressively”. SocGen previously said it was targeting a cost-to-income ratio of below 60 per cent by 2026.
The company has disposed of some non-core unites and Krupa is also focusing on reducing everyday expenses.
Krupa said IT spending could still be cut back and that reducing the bank’s reliance on external consultants could further cut its cost base, echoing moves taken by other European banks in recent years, such as UniCredit and Julius Baer.
SocGen spent €1.25bn on consulting fees last year, slightly down from €1.32bn in 2023, according to its latest financial statements.
“To help reduce the complexity, we don’t need more consultants, we need less of them,” Krupa said. “Because what we’re going to come up with [ourselves] in terms of solutions is most likely going to be simpler and more efficient than if we asked 15 people about what they think we should do.”
The turnaround plan outlined by Krupa in September 2023 was initially poorly received by investors — so much so that it sparked accusations that he had imperilled the lender’s status as a leading French bank.
“He was accused of shrinking the bank and selling too many businesses,” said one person familiar with the bank’s strategy.
But the company’s share price has risen more than 70 per cent over the past year, as recent results appeared to show that Krupa’s plans to build up capital reserves had borne fruit. French banks have also benefited from a cut by the government to rates on popular regulated savings accounts, which has reduced the amount they have to pay out to savers.
“All the stars have aligned for Krupa,” another person familiar with the company said.
The company’s common equity tier one ratio — a key measure of balance sheet strength — stood at more than 13 per cent at the end of 2024, on track to meet its 2026 target.
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