PARIS: Societe Generale's plan to get profits back to pre-crisis levels is on track, it said on Wednesday, after a pick-up in retail banking and its equities derivatives business helped boost fourth-quarter earnings.
The head of France's second-biggest bank said revenues were on the increase at its investment bank, a key element in the group's 2012 turnaround target, to help the bank's shares hit a 13-month high.
"2011 means more revenues than 2010, that is clear," Chief Executive Frederic Oudea Oudea said.
SocGen has already said it will "optimise" its portfolio of assets via sales and acquisitions, but Oudea said for now there were no attractive assets on the market.
SocGen shares were up 4.7 percent, at 51.16 euros ($69.22), after the bank met expectations with a near quadrupling in its fourth-quarter net profit and announced a sharp increase in the dividend.
"This (Q4 result) justifies the rebound of the stock over the past few months ... The dividend increase is also a good sign," said Francois Chaulet, head of Montsegur Finance.
Its rise lifted rivals BNP Paribas, Credit Agricole and Natixis by between 3 and 4.7 percent.
Shares in the sector have rebounded strongly this year, outperforming the STOXX Europe 600 bank index on hopes the eurozone has turned a corner and incoming Basel III capital requirements are manageable.
The current year had started well, Deputy Chief Executive Severin Cabannes told Reuters Insider television.
"The market situation (between) January and now is slightly better than what we saw in the last quarter ... We can see since the beginning of the year a better trend," he said.
SocGen stuck to its 2012 net profit target of 6 billion euros ($8.1 billion) after reporting a 2010 profit of 3.9 billion euros, more than five times its 2009 level and above its 2006 level of 5.2 billion, before the bank hit trouble.
Oudea is attempting to boost investor confidence after the financial crisis and the Jerome Kerviel rogue trading scandal and catch up with arch-rival BNP, whose market value is now almost double SG's. BNP's shares are down 27 percent since the end of 2006, while SocGen's have tumbled 55 percent.
SocGen also said it would not need to raise new capital to maintain its core Tier 1 capital adequacy ratio at 8.5 percent when tougher Basel III banking rules are introduced from 2013. The ratio was 8.5 percent at the end of last year.
Cabannes said it was too early to gauge the financial impact from unrest in Egypt after popular protests swept President Hosni Mubarak out of power. The group is seen as among the most exposed international banks to Egypt via its National Societe Generale Bank subsidiary.
He added there were currently no plans to close operations in Ivory Coast, plagued by disputed elections and turmoil.
SocGen reported a fourth-quarter net profit of 874 million euros, up from 221 million a year ago and in line with average forecast given in a Reuters poll of analysts.
The dividend for 2010 was raised to 1.75 euros from 0.25 euros a share last year and 4.42 euros for 2006. Banks have been cautious about restoring dividend payouts that were all but wiped out during the financial crisis as they seek to meet the tougher core capital requirements of Basel III.
SocGen's investment bank proved more resilient in the fourth quarter than most rivals.
Its fixed income revenue fell 30 percent from the previous three months, echoing problems seen at Credit Suisse and Goldman Sachs as markets were hit by the eurozone debt worries, but its equity derivatives revenues held firmer.
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