PARIS: Societe Generale, France's second-biggest listed bank, posted a 57 percent rise in the third-quarter net profit as a drop in loan-loss provisions helped offset revenue weakness in French retail banking and equities trading.
SocGen is keeping faith with its emerging markets exposure, cutting costs, and increasing cross-selling of products between business lines to better compete for market share in the absence of good growth at home.
Revenues, excluding non-economic items, fell 1.8 percent to 5.9 billion euros (7.36 billion US dollar) in what it called "an adverse environment".
Weak demand, low interest rates and a regulatory cap on processing fees weighed on its retail banking performance in France, where revenue fell 3.2 percent. Revenues were flat in Russia, but increased strongly in Africa.
SocGen, which confirmed its 2014-2016 strategic plan targets, derives a quarter of its revenue from its operations in emerging markets and aims at maintaining the balance versus mature markets.
SocGen reported a third-quarter net profit of 836 million euros on Thursday, up from 534 million a year ago. Analysts expected earnings of 794.7 million euros, on average, according to Thomson Reuters I/B/E/S.
Loan-loss provisions were down by 41 percent versus the same period a year ago, helped by a drop in the cost of risk in corporate and investment banking. Provisions for bad loans fell in France, were stable in Russia, but increased in Romania.
The bank said its litigation provisions were unchanged at 900 million euros versus the previous quarter.
SocGen's corporate and investment bank, which is traditionally weighted more towards equities trading than fixed income, saw a 25 percent slump in equities trading revenues on the back of low volatility and volumes in the third quarter.
Comments
Comments are closed.