French bank takes action on US$3.9b in debts
Source: Agencies |
May 6, 2010, Thursday
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Print Edition
Print Edition
FRENCH bank Societe Generale SA said yesterday that its exposure to Greece's government debt was 3 billion euros (US$3.93 billion) and it had tightened credit at its Greek unit in response to the financial crisis there.
The Paris-based bank said the financial crisis had hurt the performance of its majority-owned Geniki Bank Greek subsidiary in the first quarter, and that it was tightening loan approval conditions there among other precautionary measures.
Societe Generale disclosed the Greek exposure alongside its first-quarter earnings report which showed net profit increased to 1.06 billion euros in the period.
That compared to a 278 million euro loss in the year-earlier quarter, when the bank's earnings were hammered by nearly 2 billion euros in writedowns and provisions on the devalued assets linked to United States real estate.
The bank warned that "the pick-up in activity in developed European countries is much less pronounced than in the other areas of the world," and said European governments' efforts to reduce public deficits and debt was likely to weigh on the zone's near-term economic prospects.
Societe Generale owns 54 percent of Athens' based Geninki Bank, which it bought in 2004.
The Greek financial crisis that has spilled over into other parts of Europe "had a considerable impact" on the bank's performance in the first quarter, Societe Generale said.
"In light of this situation, the group has implemented a number of precautionary measures, in particular tightening its loan approval conditions and cutting costs," it said.
Higher risk provisions due to the Greek crisis helped push earnings in Societe Generale's international retail banking division down 5.8 percent in the first quarter.
The Paris-based bank said the financial crisis had hurt the performance of its majority-owned Geniki Bank Greek subsidiary in the first quarter, and that it was tightening loan approval conditions there among other precautionary measures.
Societe Generale disclosed the Greek exposure alongside its first-quarter earnings report which showed net profit increased to 1.06 billion euros in the period.
That compared to a 278 million euro loss in the year-earlier quarter, when the bank's earnings were hammered by nearly 2 billion euros in writedowns and provisions on the devalued assets linked to United States real estate.
The bank warned that "the pick-up in activity in developed European countries is much less pronounced than in the other areas of the world," and said European governments' efforts to reduce public deficits and debt was likely to weigh on the zone's near-term economic prospects.
Societe Generale owns 54 percent of Athens' based Geninki Bank, which it bought in 2004.
The Greek financial crisis that has spilled over into other parts of Europe "had a considerable impact" on the bank's performance in the first quarter, Societe Generale said.
"In light of this situation, the group has implemented a number of precautionary measures, in particular tightening its loan approval conditions and cutting costs," it said.
Higher risk provisions due to the Greek crisis helped push earnings in Societe Generale's international retail banking division down 5.8 percent in the first quarter.
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