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November 5, 2009

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SocGen's net profit more than doubled

SOCIETE Generale SA, France's second-largest bank, said yesterday that net profit more than doubled in the third quarter after better market conditions helped earnings at its investment banking unit.

SocGen said in a statement that it made a net profit of 426 million euros (US$627 million) in the July to September period, compared with 183 million euros a year earlier.

The results were slightly lower than the consensus forecast. Analysts surveyed by Thomson Reuters had predicted a net profit of 457 million euros.

The Paris-based bank said that markets recovering from the collapse of Lehman Brothers last year had normalized further during the quarter.

SocGen recorded net profit of 133 million euros at its corporate and investment bank in the quarter, compared with a net loss of 240 million euros a year earlier, despite 751 million euros in losses and writedowns mainly linked to the tightening of credit spreads.

The results helped offset a decline in profit at its core French retail banking business. The unit reported a 14 percent drop in net profit to 287 million euros in the period.

In October, SocGen completed a 4.8 billion euro capital increase in order to pay back a total of 3.4 billion euros in government bailout funds. The rest of the money will strengthen SocGen's capital position and fund the acquisition of Franco-Belgan lender Dexia SA.

The bank's Tier One ratio, seen as a key measure of a bank's financial health, increased to 10.4 percent in the quarter from 8.5 percent a year earlier.


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