(Adds quote on not affecting dividend policy, date of strategy
presentation in November)
PARIS, March 22 Societe Generale plans
to spend an extra 250 million euros ($270 million) this year on
its French retail banking business, its deputy CEO said, as it
fortifies itself against increasing competition from online
The bank has cut overheads at its French retail arm where
net interest income fell more than 5 percent in 2016. It is
investing to bolster online and mobile banking while cutting
back-office centres. It closed 92 bank branches last year.
"Given the good performance of other businesses, we have
decided to accelerate, to have 250 million euros of additional
capital expenditure ... without changing our dividend guidance,"
Severin Cabannes told a conference, according to a webcast on
the bank's website.
Last month SocGen said it planned to keep increasing the
dividend and maintain the current 50 percent pay-out ratio.
Deputy Chief Executive Severin Cabannes also reiterated that
SocGen's French retail banking revenues would weaken in 2017 at
the same pace as in 2016, indicating a decline of up to 3.5
Rock-bottom interest rates have hurt European banks, but the
U.S. Federal Reserve's decision on March 15 to raise interest
rates has increased the likelihood of higher European lending
rates in the not too distant future.
ECB President Mario Draghi reaffirmed on Thursday that the
euro zone's central bank would first stop adding to its 2.3
trillion euro bond-buying programme and only afterwards consider
any increase in its interest rates. But investors are already
assessing how much European banks could make in a higher rate
Cabannes estimated that a 1 percentage point rise in the
European yield curve could have a positive impact of 1 billion
euros on SocGen's earnings over three years.
Cabannes also added that the bank would present a new
strategic plan on Nov. 28.
($1 = 0.9259 euros)
(Reporting by Maya Nikolaeva; Editing by Louise Heavens, Greg