Societe Generale, France's second-biggest listed bank, warned of fresh pain ahead in 2012 after a grim fourth quarter as it steps up efforts to cut debt via asset sales and battle a European economic slowdown. In contrast with larger local rival BNP Paribas, which beat forecasts on Wednesday, SocGen posted a worse-than-feared 89 percent slump in quarterly earnings on Thursday after it sold over 10 billion euros' ($13 billion) worth of assets to meet tougher capital requirements six months early.
"We will no doubt have more deleveraging costs in 2012," Chief Executive Frederic Oudea told Reuters in an interview. "We need to be prudent because I think the environment is going to stay volatile in 2012, but the start of the year has been good in (capital) markets."
SocGen's key corporate and investment bank division slumped to a quarterly net loss of 482 million euros. The falling value of toxic assets left over from the 2008 financial crisis, as well as the impact of the eurozone debt crisis on financial markets, slashed the division's revenues by two thirds. Shares in SocGen were down 2.8 percent at 21.75 euros at 0820 GMT, underperforming a 1.7 percent lower STOXX Europe 600 bank index.
SocGen said quarterly fell to 100 million euros ($131 million) from 874 million a year earlier, hit by toxic assets at its investment bank and further writedowns on Greek debt.
Earnings missing forecasts for 190 million, according to a Reuters poll of 10 analysts.
Revenues fell 12.4 percent to 6.01 billion euros, beating forecasts for 5.81 billion euros. The bank said it had, however, met tougher regulatory capital requirements six months early, with a core Tier 1 ratio of 9 percent under Basel 2.5, following in the footsteps of BNP. The bank also took a 162 million euro charge on its Greek sovereign debt, which it has now written down by 75 percent.
Comments
Comments are closed for this article.