SCGLY - Quarter By Quarter Outperformance Is Building Société Générale's Credibility

• SocGen continues to string together substantially better-than-expected quarters, with a fourth quarter that beat on almost every line that matters.
• The French Retail business seems to have more than stabilized, and initial results from the restructured GBIS segment have been encouraging.
• I like management's decision to deploy more capital into leasing (a double-digit ROTE business) and discuss taking over some or all of ING's French retail operations.
• Expectations are heading higher and SocGen now must show that it can consistently generate improved profitability; a low single-digit long-term growth rate still supports an attractive prospective return.

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