Banking stocks are struggling across Europe this Friday, particularly in Paris where Crédit Agricole is down 1% and BNP Paribas has shed 1.8%, with the latter trailing at the bottom of a CAC 40 index that has retreated 0.8%.

Banks are pulling back in the wake of several major U.S. peers such as JPMorgan Chase (-2.7%), Bank of America (-1.6%), and Goldman Sachs (-1.2%) the previous day, amid a resurgence of risk aversion following recent events in the Gulf.

'Indeed, there has been a clear escalation in recent hours, with U.S. strikes on targets in Iran in response to Iranian fire on three U.S. warships in the Strait of Hormuz,' Deutsche Bank noted this morning.

'And in return, Donald Trump posted that 'we will hit them much harder, and much more violently, in the future, if they don't sign their deal, FAST!'', the German bank continued in its note.

UBS commentary supports Société Générale

Nevertheless, Société Générale has managed to limit its decline to just 0.6%, a performance in line with the broader Paris market, aided by positive remarks from UBS. The Swiss bank reaffirmed its 'buy' rating on the stock, with a price target slightly raised from 85.4 EUR to 86.1 EUR.

'We see truly significant value in Société Générale, provided that management holds the line on costs, capital, and capital expenditure during its September Capital Markets Day (CMD),' the bank stated.

Shares cancelled on Thursday to reduce capital

Furthermore, Société Générale announced on Thursday evening that its Board of Directors had decided on April 29, under authorization from the Extraordinary General Meeting of May 22, 2024, to reduce its share capital on May 7, 2026.

The banking group has thus proceeded with the cancellation of 7,329,781 shares that had been previously repurchased. Consequently, Société Générale's share capital is now composed of 744,394,214 ordinary shares.