SocGen hit by Russian exposures

 
Tim Wallace
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GIANT French bank Societe Generale slashed its Russian goodwill assets by €525m (£430.7m) yesterday over political uncertainty around the Ukraine crisis.

Profits fell 13.3 per cent as a result, with the bank reporting a net income of €315m for the quarter.

However, investors were unflustered as the bank’s underlying profits came in almost exactly as forecast.

Underlying pre-tax profits totalled €1.29bn, just one per cent shy of the anticipated level.

Underlying revenues came in at €5.8bn, a rise of 3.3 per cent on the year, exceeding operating expenses, which edged up just 0.2 per cent to €3.88bn.

By business line, its French retail banking arm reported strong operating income of €512m, up 24.2 per cent on the year.

International retail banking performance also improved with profits up 0.4 per cent to €1.33bn,

Global markets revenues disappointed, falling 7.9 per cent to €1.2bn. Declining revenues in fixed income, currencies and commodities were particularly to blame, falling 25.3 per cent to €556m.

By contrast with the squeeze on bond markets, equities revenues shot up 9.3 per cent to €688m.

Post-tax return on equity fell from 2.8 per cent in the first quarter of 2013 to 2.2 per cent this year.

But the bank’s common equity tier one capital ratio improved rapidly from 8.7 per cent to 10.1 per cent.

SocGen’s shares slid 0.82 per cent.