Société Générale said Monday it had received notice from the European Central Bank (ECB) of a new capital requirement setting its minimum consolidated Common Equity Tier 1 (CET1) ratio at 10.41% from Jan. 1, 2027.
The new floor is 15 basis points above the 10.26% minimum Société Générale disclosed for 2026. The notice sets consolidated minimums of 12.33% for Tier 1 capital and 14.89% for total capital. The CET1 minimum includes a 0.86% countercyclical buffer and a 1.125% buffer for other systemically important institutions.
The bank said the ECB notified it of a 2.37% Pillar 2 requirement (P2R), including at least 1.39% in CET1. It said 0.12% of the requirement reflects Pillar 2 prudential expectations on calendar provisioning for nonperforming loans granted before April 26, 2019. A separate 0.1% P2R for the leverage ratio brings that minimum to 3.6%.
Société Générale reported a CET1 ratio of 13.2% and a leverage ratio of 4.3% on June 30, 2026. The bank put its margin above the new CET1 minimum at about 280 basis points.
The ECB revised the method used to set Pillar 2 requirements for its 2026 supervisory review cycle, with requirements from that cycle taking effect Jan. 1, 2027. The bank-specific legal capital add-on addresses risks that Pillar 1 requirements may not fully cover. The ECB says a shortfall can lead to supervisory measures, including sanctions.
Separately, Société Générale said in April that its combined buffer requirement would rise by 25 basis points in two phases: 12.5 basis points effective Jan. 1, 2027, and a further 12.5 basis points effective Jan. 1, 2028. The bank linked the buffer increase to the ECB’s publication of its systemic bank score and said it had included the change in a capital trajectory targeting a CET1 ratio above 13%.
In July, Société Générale cited its capital position when announcing a €1.5 billion share buyback and an interim dividend of €0.75 per share. The second phase of the combined buffer increase is scheduled for Jan. 1, 2028.
