Good morning from the Financial Times.
Today is Tuesday, February 3rd, and this is your FT News Briefing.
France finally has a budget, and Disney's CEO search is entering a whole new world.
Plus, Societe Generale used to be a punchline in European banking.
Sock Gen is not the problem child anymore.
So what is it exactly?
Like, how do you define them?
And I think he's yet to really answer that question.
We'll take a crack at that one in a bit.
I'm Mark Filippino, and here's the news you need to start your day.
The French government had a rowdy Monday night.
Prime Minister Sébastien Le Cornu survived a no-confidence vote and the country passed a deficit-cutting budget for 2026.
Le Cornu is President Emmanuel Macron's seventh prime minister.
And this revolving door of PMs partly exists because they were unable to cut the country's deficit.
France has the third-widest deficit in the Eurozone.
Le Corneau got this budget over the line by using a constitutional power that allows the government to enact a budget without parliamentary support.
However, it has to survive a no-confidence vote.
French politics threw the country's bond market into disarray last year, but it recovered over the past couple of weeks on the expectation that this budget would pass.
You know what they say, if the glass slipper fits, make them CEO.
Disney is on the hunt for a new chief executive.
The company will hold a meeting later this week to discuss who will take the helm from current CEO, Bob Iger.
The FT's Los Angeles bureau chief, Chris Grimes, has more on this.
Hi, Chris.
Hi there.
So do we know who the favorite is to replace Iger?
Well, the talk has been centered on two people at Disney who are internal candidates.
One is Josh Damara, who is the head of the theme parks division, or they call it the experiences division, which is theme parks and increasingly, cruise ships.
Damara has been overseeing this rapid expansion of theme the cruise ship line.
So this is where the growth and where the money is going.
Josh DeMauro has been given a $60 billion budget to expand the experiences business.
And then the other candidate is Dana Walden.
Dana Walden's a longtime TV executive at Disney.
She's been overseeing Disney Plus and Hulu.
Yesterday, they posted really strong growth.
But she also oversees the linear TV business, which is really kind of managing a declining business.
How important, Chris, is it that Disney gets this succession plan right?
Well, succession has been a really fraught process at Disney, as you know.
I mean, Iger has been in the job since 2005.
He re-upped a number of times.
Finally, he stepped down in 2020, but remained involved in some capacity and really only handed over the keys to Bob Chapek in 2022.
And you may remember, Bob Chapek didn't stay in that job for very much longer.
He was ousted in November of 2022, and Iger returned to try to right the ship.
And right the ship he did, right?
I mean, Disney has really thrived since he came back as CEO.
Well, thrived.
I think some parts of it have thrived.
Definitely the theme parks have been a highlight.
Other parts have just been a matter of restructuring and setting priorities.
But you know, he's been dealing with the things that his competitors have been dealing with, which is the rapid decline of traditional TV, which was a cash cow for TV forever until the last few years.
And then he's had a lot of headaches from the Trump administration over the past year.
You know, he sued ABC and they had to settle.
So it's, you know, it's not the company, it's not the environment that Bob Iger knew in his first stint as CEO.
So Chris, whether it's Josh DeMauro or Dana Walden, what will the next CEO of Disney have to work on when they take over?
I think one of the main questions that the company is going to face is whether Disney, as it's currently composed, needs to be broken up.
I mean this is kind of a radical idea, but Warner Brothers and Comcast are spinning off their cable TV businesses, which have been a drag on them.
Iger and Dana Walden have believed that having the linear TV business has been good.
You can show something like Abbott Elementary, a popular show on ABC.
It can go on ABC and also on Hulu, right?
They feel like that's a better model.
But we'll see if the next CEO has a look at that and says no, actually traditional TV is just too big of a drag.
And we need to spin it off.
That's EFT's Chris Grimes in LA.
Thanks so much, Chris.
Thank you.
President Donald Trump said yesterday that the U.S. will lower tariffs on India.
He and Prime Minister Narendra Modi made the deal after India agreed to stop buying Russian oil.
India imports about 90 of its oil from Russia, and Trump says that it's fueling Moscow's war machine against Ukraine.
Now, we should point out that even with this change, U.S. tariffs on India are still at 18%.
But the new rate is way lower than the 50 that it was at, which was one of the highest levels in the world.
Trump said in a Truth Social post yesterday that he spoke with Modi about potentially buying more oil from the US and even Venezuela.
It might be time to start calling Societe Generale the comeback kid.
The French bank used to be considered the problem child of European banking, but its stock price has tripled over the past two years.
Here to tell us how SockGen dragged itself back from the brink is the FT Sarah White in Paris.
Hi, Sarah.
Hi there.
So a lot of this success is attributed to Slavomir Krupa, who took over as CEO in 2023.
Give us a sense of what things looked like back then.
Sockgen had been for 15 years under the same CEO, previously Frédéric Oudéa, and he had taken over in the wake of the biggest calamity to ever hit this bank in 2008, when they discovered they had a rogue trader.
They had an enormous amount of, you know, several billion euros in losses at the time.
They recovered from the losses.
But it shook the bank so profoundly that under Oudea, for the last you know for 15 years, it's just been a kind of steady stream of cutbacks and restructurings and slow sort of shrinkage.
And I think by the time Slavomir Krupa took over, it was France's third biggest bank.
It was perpetually seen as a potential takeover target.
And whenever there was a problem in European banking, everybody would always kind of go oh, Sockgen may be next kind of thing.
So then how did Krupa turn things around when he became CEO?
It wasn't immediate for Krupa.
So in his first few months, he basically said, I have to present realistic targets.
So I'm projecting very minimal, you know, 0% revenue growth in the next two years.
What I need to do is rebuild capital and cut costs.
And actually, when he presented that, investors hated it.
But what happened next was that he delivered on those targets kind of one by one.
So he defined a cost target and he hit it and then he surpassed it.
He said he was going to rebuild capital.
So he sold off some non-core divisions.
And I think that was actually a change for the bank as well.
It had a bit of an issue of you know, keep like over-promising and then always slightly failing to impress on that account.
So that sort of recipe plus actually cutting costs have worked magic for him when people have seen that he's consistently delivering on that.
And how does SockGen's turnaround fit in with what's going on with French banking more broadly?
So French banks have had a little bit of a rough ride of late, except for Sockgen, which is kind of.
The remarkable part of this story is that they've always been the lame duck here.
You know, investors are worried about taxes going up in France.
Instability always hits bank shares.
So they've been a bit more selective on bank shares.
And in that mix, a lot of them have chosen to focus on, you know, Sockgen's turnaround.
And so that's favoured Sockgen. and hasn't been as good for some of their big rivals.
So notably BNP, which it has to be said is a much bigger bank than SockGen.
Their shares have really lagged their peers across Europe and have lagged that big turnaround of SockGen in the last year.
BNP specifically has had a few of its own internal issues.
So it's had a court case relating to its business in Sudan that hasn't gone its way yet.
So over the past 18 months or so, it's had its own series of problems.
So Krupa, as we mentioned before, obviously had a lot of success improving SockGen's share price.
What's next for the bank and for him?
I mean, he still has a long way to go to show that this turnaround is sustainable.
For the most part, it's been focused on cost cuts so far.
But their cost to income ratio is still far higher than it should be and compared to other European banks.
So he still had to deliver a little bit more there.
And then one thing I've heard from you know, investors and analysts is that Thus far there was a kind of reset, but they want to hear a bit more about growth.
They have some assets.
So they have an online bank called Boso Bank that's done extremely well in France, better than any competitors.
So that will be one engine for growth.
But, you know, they remain a kind of mid-sized European bank.
And, okay, SockGen is not the problem child anymore.
So what is it exactly?
Like, how do you define them?
And I think he's yet to really answer that question.
Sarah White is the FT's Paris correspondent.
Thanks so much, Sarah.
Thank you.
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