French bank Societe Generale reported a worse-than-expected 42 per cent drop in second-quarter earnings today, hit by one-off write-downs on US fund unit TCW and Russian subsidiary Rosbank ROSBR.UL.
France's second largest listed bank is more than halfway through a plan to slash debt and sell assets at its corporate and investment bank. It is under pressure to beef up balance-sheet strength and sources have told Reuters a sale of TCW is close.
Net income fell to €433m (£340m), missing the average of analyst estimates of about €677.9m according to a Reuters poll. Revenue fell 3.6 per cent to €6.3bn, better than the poll average of €6.1bn.
In addition to write-downs totalling €476m, which SocGen blamed on the worsening environment for fund managers in the case of TCW and a strategic overhaul at Rosbank, SocGen took a hit on the cost of selling assets to cut debt.
SocGen deputy chief executive officer Severin Cabannes told Reuters it was difficult to make forecasts in the current environment but said the pain of asset sales would ease. He refused to say whether TCW was up for sale.
"We will continue to deleverage (but) at a lower pace than the two previous quarters," he said. "It will still have an impact."