PARIS: French bank Societe Generale posted stronger-than-expected profits Wednesday, sending its shares sharply higher.
Like its domestic rival BNP Paribas which reported its earnings a day earlier, Societe Generale benefited from strong income from French and international retail banking and fewer loans going bad, but investment banking suffered from an adverse market environment.
Exceptional items, mostly a revision of the value of Societe Generale's liabilities, helped boost net profit.
Societe Generale's net profit rose 6.5 percent to 924 million euros ($1.1 billion), against analysts' expectations centring on 884 million euros.
Once exceptional items were stripped out, net profit slipped 0.5 percent.
The bank's shares soared 3.9 percent in morning business on the Paris stock exchange, where the CAC 40 index was flat overall.
"The robustness of French banks is being confirmed," brokers Aurel BGC said in a note.
Loan risk reduction by 14.5 percent was a major factor behind Societe Generale's performance, the bank said, adding the risk level was now the lowest since the 2008 financial crisis.
Societe Generale chief executive Frederic Oudea said the group had "generated sound results" in an environment which was more challenging than a year ago.
The French bank said it would continue slashing costs in its global banking and investment businesses, where it was looking to save more than 200 million euros by the end of next year, in addition to the 850 million it is targeting in a current cost-cutting drive.
Comments
Comments are closed.