Societe Generale Q2 Earnings and Outlook: Strong Performance and Raised Targets

Societe Generale has reported a sharp rise in Q2 profits, with retail banking rebounding in France and upward revisions to 2025 targets. The bank's shares surged on the news, while ING also reported interest income growth in Q2. Meanwhile, European stocks ended at an over one-week low due to US tariffs impacting beverage makers. The Fed's Powell has moved to the front line, and US futures rose on earnings boosts and a post-BOJ yen gain.

Societe Generale has reported a significant increase in Q2 profits, with retail banking in France rebounding strongly. The bank's shares surged on the news, with the company reporting a 31% year-on-year increase in Q2 group net income to €1.45 billion, surpassing the €1.19 billion average estimate from analysts [2]. This performance was driven by a 15% increase in net interest income (NII) in the core French retail division, which doubled its net profit [2].

The bank's strong performance has led to an upgrade of its 2025 financial targets. Societe Generale now expects a return on tangible equity of around 9% in 2025, up from a previous goal of above 8%, and a cost-to-income ratio below 65%, compared to a prior forecast of under 66% [2]. The bank's CEO, Slawomir Krupa, commented that the results were "a testament to our teams' commitment and the strength of our businesses" [2].

In addition to its financial upgrades, Societe Generale has announced a new €1 billion share buyback program, set to begin on August 4, and an interim cash dividend of €0.611 per share to be paid on October 9, 2025 [1]. These moves reflect the bank's strong capital position, with a CET1 ratio at 13.5% at the end of Q2 2025 [1].

Meanwhile, ING Groep also reported interest income growth in Q2 2025. The bank's net profit for the quarter was €1.68 billion, beating expectations and supported by resilient income and lower tax rates [3]. ING's CFO, Tanate Phutrakul, noted that the bank expects a slow rebound in commercial net interest income in the second half of the year [3].

However, European stocks ended the day at an over one-week low due to US tariffs impacting beverage makers, with luxury carmakers including Porsche and Aston Martin flagging potential U.S. price hikes [5]. The Fed's Powell has moved to the front line, and US futures rose on earnings boosts and a post-BOJ yen gain [5].

References:
[1] https://www.societegenerale.com/en/news/press-release/financial-results-q2-2025
[2] https://www.investing.com/news/earnings/societe-generale-soars-on-raised-profitability-target-q2-results-beat-4161848
[3] https://www.reuters.com/business/finance/ing-eyes-second-half-interest-income-growth-after-q2-beat-2025-07-31/
[5] https://www.reuters.com/markets/europe/european-shares-close-flat-investors-weigh-us-tariff-impact-earnings-2025-07-30/