Societe Generale’s Digital Banking Expected to Bolster Overall Business

Analysts expect Societe Generale’s digital retail unit to boost business as a whole.

That’s according to a report Tuesday (March 4) by Bloomberg News, citing a note from Jefferies analysts. They project that a decline in costs for BoursoBank, the French bank’s digital retail side, will help drive profitability.

The analysts project that the bank as a whole will see an 11.6% return on tangible equity — a crucial marker of profitability — in 2027, the report added.

Bloomberg notes that Societe Generale’s shares have been climbing as CEO Slawomir Krupa has pivoted from generating capital to giving money back to shareholders, and that the bank’s retail unit has previously held back growth.

BoursoBank is expected to achieve earnings of 322 million euros ($339 million) as it approaches a target of 8 million customers and client acquisition costs drop, the Jefferies analysts said.

“The market does not appreciate the fact” that the digital unit’s approximately 1,000 employees serve 7.2 million clients, versus 30,000-plus workers for about 10 million customers at Societe Generale’s brick-and-mortar retail banking network, the analysts added.

In other digital banking news, PYMNTS wrote last month about efforts by credit unions to compete against big banks and — more recently — digital-only lenders.

“The competition may seem a bit skewed in favor of the larger, marquee names in financial services,” that report said.

“After all, they spend millions of dollars — sometimes billions of dollars — annually in pursuit of innovation, particularly on digital initiatives that will attract younger consumers as they set up primary checking and savings accounts and provision credit cards into digital wallets.”

But as Denise Stevens, executive vice president and chief product officer at Velera, said in an interview with PYMNTS, “the credit unions are closing the gap — and they’re much more focused on the prioritization of investments in meaningful products and services for their membership base.”

Research by her organization and PYMNTS Intelligence shows that 55% of credit unions (CUs) say they are planning to innovate self-service digital solutions in the next three years, while half of top-performing CUs test innovations in-house and with members to make upgrades.

Forward-thinking credit unions have “doubled down on digital,” Stevens said. “If it’s not the top priority, then it’s one of the top priorities.”