|
Societe
Generale SA, France’s second- largest bank by market value, said
first-quarter profit fell 14 percent, hurt by a charge tied to its own
debt and provisions resulting from political turmoil in Egypt
Net income was 916 million euros ($1.36 billion), compared with 1.06 billion euros a year earlier, the Paris-based company said in a statement today. Earnings missed the 1.06 billion-euro average estimate of 10 analysts surveyed by Bloomberg.
Chief Executive Officer Frederic Oudea, who took over three years ago after the bank suffered a record loss from unauthorized trading, aims to boost annual profit to about 6 billion euros next year from 3.92 billion euros in 2010. Earnings jumped almost sixfold last year as provisions for risky assets declined.
The results showed the “robustness” of Societe Generale (GLE)’s businesses “in an uncertain international, political, economic and financial environment,” Oudea said in the statement.
Leaving aside the 362 million-euro accounting charge resulting from an improvement in the value of its own debt, Societe Generale’s first-quarter profit rose 10 percent as French consumer-banking and corporate- and investment-banking earnings increased on lower bad-loan provisions.
Societe Generale rose 13 percent this year to 45.52 euros in Paris trading, increasing its market value to 34 billion euros and surpassing the 1.7 percent advance in the 48-company Bloomberg Europe Banks and Financial Services Index.
BNP Paribas SA, France’s biggest bank, rose 1.1 percent in Paris yesterday after saying first-quarter net income rose to 2.62 billion euros, beating the estimate of analysts. The stock has advanced almost 14 percent in 2010.
Egypt, Tunisia
Oudea, 47, plans to balance earnings from corporate- and investment-banking with higher revenue from consumer lending in countries such as Russia.
He became CEO in May 2008, four months after the company announced a 4.9 billion-euro trading loss it blamed on Jerome Kerviel, 34. Oudea added the title of chairman a year later, when Daniel Bouton, now 61, stepped down.
Societe Generale, which gained almost 3 million clients in Russia by acquiring control of OAO Rosbank in 2008, is now aiming to add 4 million customers by 2012 by opening at least 500 branches in 41 countries stretching from Senegal to Romania.
Upheaval in parts of Africa dented earnings in the past quarter. Profit from international banking fell 61 percent to 44 million euros as Societe Generale booked about 50 million euros of provisions in Egypt, Tunisia and Ivory Coast, “countries undergoing political transition,” it said.
French Banking
French consumer-banking profits more than offset that impact, climbing 26 percent to 352 million euros on a 7.7 percent increase in revenue.
The bank posted a profit of 131 million euros at its insurance and financial-services division, up 87 percent.
Earnings at the corporate- and investment bank rose 9.2 percent to 591 million euros on lower provisions and writedowns from toxic assets.
The bank had 96 million euros of provisions in the quarter from risky assets, including asset-backed securities and debt backed by U.S. bond insurers, down from 214 million euros a year earlier, according to the statement.
The risky assets generated 42 million euros of revenue in the first quarter, the company said.
BNP Paribas (BNP), along with UBS AG (UBSN) and Credit Suisse Group AG (CSGN), Switzerland’s largest banks, and London-based Barclays Plc, posted lower profits at their investment banks as fixed-income revenue slumped.
Return on Equity
Revenue from fixed-income, currencies and commodities at Societe Generale declined 8.5 percent to 713 million euros, while equities revenue climbed 12.5 percent, the bank reported.
Investment banks may struggle to boost profitability after regulators instructed them to hold more capital in reserve against possible losses following the global financial crisis.
Societe Generale said return on equity, a measure of profitability, was 8.8 percent in the first quarter, compared with 11.1 percent a year earlier.
Societe Generale owns a controlling stake in Greece’s Geniki Bank (TGEN) SA, which has been unprofitable each year since 2003.
To participate join us at EGYPT FORUMS
This Article at EGYPT FORUMS
» No Comments
There are no comments up to now.
» Post Comment
|