Markets cheer surprise leap in SocGen profits

 
Tim Wallace
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INVESTORS surged into Societe Generale stock yesterday sending the share price soaring by 10.4 per cent after the bank’s profits more than doubled in the second quarter.

The French lender reported strong trading volumes, falling costs and improving capital buffers for the three-month period.

Profits came in at €955m (£833.6m), up 119 per cent on the €436m recorded in the same period of 2012.

The group’s investment banking arm drove the improvement with revenues soaring 42 per cent to €1.7bn, with rising volumes in structured products and equity derivatives leading the gain.

Revenues from its French networks edged up three per cent to €2.1bn.

International retail banking units brought in €1.1bn, up 1.6 per cent.

At the same time the lender’s cost savings plan announced in May made a rapid start, trimming €170m already, out of the €900m it hopes to save by 2015. The bank’s core tier one capital ratio jumped 73 basis points to 9.4 per cent on a Basel III basis, while return on equity increased to 8.4 per cent.

“The second stage of the group’s transformation is well under way, with a positive commercial and financial momentum in all the businesses,” said chief executive Frederic Oudea.

“The group aims to be among the leading European banks and is confident of its ability to generate a return on equity of 10 per cent as from end-2015.”