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French bank sees US$2.6b in profit

FRENCH bank Societe Generale said yesterday it expects to report 2 billion euros (US$2.59 billion) in net profit for 2008 and to break even for the fourth quarter despite an exceptionally rocky year.

The bank, hurt by a massive trading loss in early 2008, cited "the solidity of its retail banking activities and its diversified business portfolio" as the reason for its overall solid performance last year.

Its shares rose 3.3 percent yesterday morning in Paris after the news to 25.45 euros.

Societe Generale said it expects 2008 net profit to be 2 billion euros but gave no other figures. Estimated net profit for the fourth quarter "should break even," it said, despite what it called the "exceptional dislocation of the financial markets" during the quarter.

The bank, one of France's biggest, will unveil its 2008 earnings on February 18.

At the beginning of 2008, the bank announced some 5 billion euros in losses that it blamed on a single trader, Jerome Kerviel, now under investigation by French authorities. The bank had included those losses on its 2007 balance sheets.

The results announcement came after France's top bankers agreed on Tuesday to give up their 2008 bonuses in exchange for a new round of government aid to boost their companies' balance sheets. French President Nicolas Sarkozy had made renouncing the bonuses a condition for banks to receive 10.5 billion euros in aid.

The bank said its asset management business "continued to suffer from outflows and depreciations affecting some asset classes" in the fourth quarter.


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