SCGLF
Société Générale S.A.
$80.51
Banks, Insurers & Asset Managers
90%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Undervalued
Trading 25.1% below fair value
You pay
$80.51
Bear
$66.30
Fair
$107.46
Bull
$132.15
Bear
$66.30
-17.7%
ROTCE 8.6% → 0.81x TBV
Fair
$107.46
+33.5%
ROTCE 11.5% → 1.30x TBV
Bull
$132.15
+64.1%
ROTCE 13.2% → 1.60x TBV
Key Value Driver
ROTCE (11.5%) vs. cost of equity (9.8%)
Implied Market Multiple
0.98x
Summary
With ROTCE of 11.5% vs. 9.8% cost of equity, fair P/TBV is 1.30x on $82.35 tangible book, implying $107.46 per share.
Warnings
Traditional cash flow models don't work well for banks — lending activity distorts how much cash the business actually generates.
Common valuation shortcuts don't apply here — for banks, interest payments are a core business cost, not overhead.
Financial statements were converted from EUR into USD using EURUSD at 1.1537 USD per EUR.
Key Risks
- Book value quality matters as much as level — check loan loss reserves
- Interest rate sensitivity creates non-linear earnings surprises
- Insurance reserving is actuarial, not financial — errors emerge slowly