Socgen profit slumps in 1st quarter
PARIS: French bank Societe Generale’s net income fell less than expected in the first quarter, as profits on equity derivative sales offset weaknesses at its retail bank and in fixed-income trading.
France’s third-biggest listed lender, whose CEO Slawomir Krupa is seeking to end several years of lacklustre performance and trim costs, said on Friday group net income over the first three months of the year was 680 million euros ($729 million).
This was down 22 per cent from a year earlier but still beat the 463 million euro average of 15 analyst estimates compiled by the company. Sales slipped 0.4 per cent to 6.65 billion euros, above analysts’ 6.46 billion euro average estimate.
Socgen’s shares jumped more than 5 per cent in early Paris trade to their highest since March 2023, in their biggest one-day increase since March 2022.
French rival Credit Agricole, which also reported earnings on Friday, posted a forecast-beating 55 per cent jump in first-quarter net profit, driven by corporate and investment banking sales.
“The CIB (corporate and investment bank) was the driver of revenue surprise,” Jefferies said in a note to clients, also pointing out the steep rise in provisions in France, which Socgen atributed to unidentified specific cases.
“We suspect this will be (a) topic of investor questions.”
Helped by eurozone interest rates remaining higher for longer than expected, many European banks have beaten expectations for the first quarter, and some have raised profit targets for the year.
French banks including Socgen have not benefited as much from the rise in rates because of the high cost of deposits in the country. Their shares have underperformed, although analysts expect the lenders to do beter when rates fall.
Socgen’s investment banking division saw its earnings jump 26.4 per cent to 690 million euros, beating forecasts, while revenues weakened 5.1 per cent to 2.62 billion euros for the quarter.