French bank shares hammered despite SocGen’s reassurances

 
Julian Harris
Follow Julian
SOCIETE Generale attempted to defend its tumbling stock yesterday, detailing plans to cut costs and sell assets to free up €4bn (£3.4bn) in fresh capital. Yet investors still fled from the bank’s shares, which sank a further 10.8 per cent during the day.

French banks were hammered on fears over their exposure to Greek debt, as concern for the ailing Eurozone economy peaked. Worries spread that French banks could face a downgrade from leading credit rating agency Moody’s.

BNP Paribas was the hardest hit among the French banks, losing 12.4 per cent, while Credit Agricole shed 10.6 per cent.

SocGen chief executive Frederic Oudea yesterday denied vehemently that any discussions were taking place regarding a possible government rescue of the bank. Oudea blamed market volatility and nervousness for its recent downturn.

The bank plans to sell assets primarily in its asset management and specialised financial services divisions.