SocGen Says It Could Boost Dividend Once Basel Rules Clear

Societe Generale SA said it could have the potential to boost dividends when it has enough clarity on the regulatory framework and the outlook for the economy.

The lender, which currently has a payout ratio of 50% of underlying net income including share buybacks, could offer more to shareholders once the implementation of the current round of Basel committee rules progresses, said William Kadouch-Chassaing, deputy general manager and head of finance in a conference on Thursday.

“In the likelihood that there is something such as a debate on excess capital, potentially, we could be more opportunistic going forward when have total clarity on the regulatory roadmap and the economic environment”, Kadouch-Chassaing said. “Possibly, there is a theoretical capacity to do more,” he said.

SocGen resumed payouts this year after recording its first annual loss in more than three decades, and distributed about 470 million euros in cash in May. The bank also plans a share buyback program of the same size in the fourth quarter, provided that the European Central Bank’s current restrictions on bank dividends are lifted then. The decision to lift the cap is “more likely than not,” according to Kadouch-Chassaing.

SocGen ended the first quarter of the year with a CET1 ratio of 13.5%, or 450 basis points above its maximum distributable amount, and aims for a 200 basis-point buffer in the long term, according to the latest quarterly earnings reports.

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