By Elena Vardon and Tracy Qu

Shares in Societe Generale traded lower after the French lender reigned in expectations about a further share buyback despite posting a rise in third-quarter profit.

Chief Executive Slawomir Krupa has been restructuring the bank in the past two years by selling assets that aren't part of its core business to simplify operations, strengthen its balance sheet and build a strong capital buffer.

The quarterly print is further proof that turnaround efforts are paying off but since hopes of increased shareholder returns have underpinned a doubling in the value of its shares this year, the update was met with disappointment when the group held off on announcing another program.

The stock initially gained in early European exchanges on what analysts described as another solid quarter of progress but reversed course to shed as much as 5% by midday on Thursday.

Societe Generale had said it would consider paying out any excess capital above its target to shareholders and recently completed the 1 billion buyback it announced in late July. At the end of the third quarter, its common equity tangible 1 ratio--which measures capital strength--stood at 13.7%, above the 13.0% level at which it said it would consider distributions.

"The fact that SG did not announce a share buyback program with 3Q results might disappoint some but as the CET 1 ratio continued to increase plus SG reiterated its capital target, this might only be a timing factor," RBC Capital Markets a wrote in a note to clients. Jefferies analysts also pointed to an absence of news on distributions, adding that "banks with meaningful excess capital ought to be buying their shares back at a 20% discount to tangible book."

For the three month period, the French lender reported an 11% rise in net profit to 1.52 billion euros ($1.76 billion). This beat expectations of a 1.305 billion-euro result taken from a Visible Alpha poll due to lighter costs and provisions for bad loans. The group said it isn't exposed to recent high-profile bankruptcies in the U.S. and has negligible exposure to the country's regional banks.

Net banking income--its top-line metric--fell 2.7% to 6.655 billion euros due to recent disposals but still beat consensus' 6.41 billion-euro estimate. Excluding these asset sales, income rose 3.8% led by growth in its French retail, private banking and insurance division, while its investment bank posted a mixed performance and revenue from its division housing international retail and mobility and financial services contracted.

"There is still a lot to do to get where we want to be, but real tangible results have pointed us in the right direction," Krupa said. The bank is on track to surpass its annual targets, he added.

Write to Elena Vardon at Elena.Vardon@wsj.com and Tracy Qu at tracy.qu@wsj.com

(END) Dow Jones Newswires

October 30, 2025 08:01 ET (12:01 GMT)

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