Arab Today, arab today socgen bank reports doubled quarterly profit
Last Updated : GMT 05:49:56
Arab Today, arab today
Arab Today, arab today

SocGen bank reports doubled quarterly profit

Arab Today, arab today

Arab Today, arab today SocGen bank reports doubled quarterly profit

Paris - AFP

French banking giant Societe Generale more than doubled its net profits in the second quarter, it reported on Thursday boosting the shares by more than nine percent. The bank said that the performance reflected an increase in deposits by customers in France and abroad during the period. Profits for the three months ending June reached 955 million euros ($1.26 billion), up 119 percent from the figure in the same quarter last year. That exceeded market expectations by a wide margin. Analysts polled by Dow Jones Newswires had forecast net earnings of 608 million euros. Net banking income, a key measure for a bank showing the difference between the cost of rewarding depositors and the price of lending, had been expected to fall by 7.7 percent but instead rested practically stable, dipping 0.6 percent to 6.23 million euros. It also lowered its commercial cost of risk, the cost of making provisions for possible losses on risky assets, to the lowest level for nearly two years. Societe Generale said it had raised its ratio of core shareholder funds and retained earnings to risks underwritten to 9.4 percent, on the basis of Basel III prudential rules which take full effect at the beginning of 2019. The bank said it was on course to exceed its target of raising this to 9.5 percent at the end of the year. The will \"probably be close to 10 percent at the end of this year\" said chief executive Frederic Oudea. He added that the bank had also already raised its leverage ratio, the amount of core capital to consolidated assets, to the Basel III level of 3.0 percent, and would increase it further. Excluding exceptional items the bank posted a return on equity of 10 percent in the quarter, a level Societe Generale aims to maintain from the end of 2015. \"We are possibly one of the rare European banks that can offer growth,\" Oudea told journalist. \"We are in the process of showing that a universal bank can deliver growth and keep good control over risks and costs.\" Although it reported weak demand for credit in recession-hit France, the bank said there was a \"strong deposit inflow\" at its domestic business. Fixed-term deposits in France were up 27 percent from the figure for the same period last year, while special savings accounts which enjoy certain advantages under the law were up 10.8 percent. Its international retail banking network also registered a rise of 5.3 percent in deposits on the back of a robust inflow in Russia, central and eastern Europe and sub-Saharan Africa. Internationally, the bank posted a net profit of 59 million euros, against a loss of 231 million euros due to writing down the value of its acquisition of its Russian unit Rosbank. The bank\'s chief was arrested for corruption in a high-profile sting operation in May, but Societe Generale said the unit produced \"encouraging results\" with retail deposits up by 12 percent and consumer loans 16 percent. Societe Generale\'s investment bank also saw its net profit nearly treble to 374 million euros thanks in part to strong results on stock markets. Markets welcomed the bank\'s results, with its shares leaping 9.3 percent to 33.03 euros in afternoon trading on a Paris market up 0.66 percent overall.  

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