The plan rightly focuses on sustainability in its narrow ESG sense as well as in its broader sense that it can be sustained over time. Anticipating average annual revenue growth between zero and 2% over the 2022-2026 period illustrates the challenges ahead.

We value the enhanced transparency on various roadmaps anchored in the previous strategic plan. Market turbulence at the end of the first quarter was a clear reminder that fixing the roof and maintaining excess buffers to avoid confidence-sensitive issues are the right priorities for banks. SG’s key strategic priorities are not fundamentally new but they are the priorities required to continue to strengthen the group’s financial profile:

• By strengthening the core capital ambition with a CET1 ratio target at 13% (up from 12%) post Basel IV implementation and very disciplined risk-weighted asset growth to create a balance-sheet-light model; and
• Improving operational leverage with a target below 60% by 2026. This is high in comparison to peers and a relative weakness but reflects the business mix e.g. cost-intensive CIB and retail activities, and the peculiarities of the French market for net interest revenue generation.

SG has made major progress on transformational initiatives within each of its three main business lines. Strategic continuity confirms that the journey is not over. We see the new three-year roadmap as an effort to reap the fruits of these strategic initiatives:

• streamlining French retail operations and increasing digital presence;
• integrating LeasePlan to form a global leader in mobility, a sector where scale matters;
• de-risking and selective leadership in CIB.

Accelerating these projects would have questioned the previous execution speed. U-turns, after years of refocusing on specific areas of strengths including via divestments and a convincing rationale to do so, would have questioned the coherence of the strategy and the use of resources.

The recently appointed CEO, was instrumental in delivering the previous plan, being in charge of the Global Banking and Investor Solutions division.

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Potential conflicts¹
Please see www.scoperatings.com for a list of potential conflicts of interest related to the issuance of credit ratings. A member of the Board of Trustees of Scope Foundation has a significant relationship with the rated entity. The Scope Foundation is a 20% shareholder of Scope Management SE, the general manager of Scope SE & Co KGaA (“Scope Group”). Scope Foundation has no financial or economic interest in Scope SE & Co KGaA and the main function of the foundation is to preserve the European identity of the shareholder structure of Scope Group.

¹Editor's note: The 'Potential Conflicts' section was added on 19 September 2023.