Open

Coming up

Don't miss

Replay


LATEST SHOWS

MEDIAWATCH

On the frontline of horror: editing images from warzones

Read more

AFRICA NEWS

Ebola: UN sets target of 60 days to turn things around

Read more

DEBATE

Europe's Desperate Seas: Migrant Deaths Crossing Mediterranean Top 3,000 in 2014

Read more

ENCORE!

'All is Well' for Lisa Simone

Read more

BUSINESS DAILY

EU questions Apple's tax deals in Ireland

Read more

FOCUS

The Iraqi TV show where victims confront terrorists

Read more

REPORTERS

Video: Syrian student risks her life to film IS group stronghold

Read more

LIFESTYLES

Forgotten and fictional sports

Read more

DEBATE

Modi in America: India's Prime minister on triumphant US tour

Read more

Business

Bad debt halves Societe Generale's profits

Text by NEWS WIRES

Latest update : 2009-08-06

French bank Societe Generale said net profit dropped 52 percent over the second quarter to 309 million euros, as bad debt provisions cancelled out a strong performance on financial markets.

AFP - French bank Societe Generale reported on Wednesday a 52-percent drop in quarterly net profits, held back by bad debt provisions but reporting strong trading on financial markets.
  
The bank made 309 million euros (445 million dollars) in the April-June quarter -- less than half the 644 million euros it made in the same period last year -- after its results were hit by a total of 1.7 billion euros in "non-recurring items."
  
These items included 1.3 billion euros in respect of an increased debt charge.
  
The bank reported that write-downs for assets considered at risk amounted to only 400 million euros, almost a quarter of the writedowns in the first quarter of 1.5 billion euros.
  
The results were also held back by provisions for bad debt of 1.1 billion euros, although this was less than 1.3 billion euros in the first quarter.
  
But excluding the exceptional items, the bank made 2.9 billion euros from market operations, notably in foreign exchange, interest rates, commodities and from recovery on stock markets.
  
Analysts polled by Dow Jones Newswires had anticipated profits of 114 million euros.
  
Shares in the bank rose 6.2 percent at 49.10 euros at lunchtime trading.
  
Performance by investment banking activities was relatively strong, with losses of 12 million euros in that key division.
  
And the bank increased its shareholder funds ratio from 9.2 percent to 9.5 percent, a high level when set against market rivals.
  
The bank suffered in Germany, where deepened recession hit its returns on business and consumer credit and which it described as being at a "difficult junction."
  
Interests in Russia accounted for half of its risk write-downs.
  
Its portfolio of assets, valued at around 20 billion euros at the end of the first quarter by financial director Didier Valet, has shed 3.0 billion euros during progressive write-downs.
  
The results contrast with those of French rivals BNP Paribas, which posted a 6.6-percent rise in second-quarter net profit on Tuesday.
  
That followed record first-half profits from emerging markets bank Standard Chartered and leading British banks Barclays and HSBC, although Britain's state-controlled Lloyds Banking Group plunged into a first-half net loss of 3.7 billion euros on Wednesday.
  
Bank of America, Citigroup, JPMorgan Chase and Goldman Sachs all beat market expectations with strong results last month.
  
Societe Generale which was nearly made insolvent last year by huge exposure on trading positions associated with trader Jerome Kerviel said that it would heed the lessons of that experience.
  
"When we come to evaluate remunerations, we will take into account not only results, but also behaviour," said chief executive Frederic Oudea. "We will take into account (acceptable) parameters as much as risk," he added.

Date created : 2009-08-05

COMMENT(S)