SocGen disappoints as misses forecasts

Elizabeth Fournier
FRENCH bank Société Générale has reported its best quarter in two years, with profits up 9.2 per cent in its investment banking arm.

But shares in the group fell as the numbers missed analyst forecasts, with its retail arm’s exposure to North African countries and banking taxes in the UK and France weighing heavily on an otherwise strong performance.

Net profits at Société Générale’s investment bank rose 9.2 per cent year-on-year to €591m (£524m), accounting for nearly two thirds of group earnings in the quarter, but overall profits dropped 13.8 per cent to €916m. The average estimate in an analyst poll was €1.06bn.

Chief executive Frederic Oudea said that the bank expected to improve profits in coming quarters, highlighting growth in the investment banking arm and the reduction of its loan-loss provisions as contributing to future increases.

He also said that the bank was on track to meet its full-year target of €6n in net profits. Revenues rose slightly to €6.62bn but were also below expectations of €6.73bn.

The bank’s international retail arm has branches in much of the French-speaking Arab world including Egypt and Tunisia, and was also hit by unrest on the Ivory Coast.

Société Générale’s shares fell 4.98 per cent yesterday to €43.26.