SocGen profits demolished by Greek writeoff

 
Tim Wallace
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THE SALE of Greek lender Geniki wiped out Societe Generale’s profits in the third quarter, according to the French bank’s financial results published yesterday.

Profits plunged 86.3 per cent to €85m (£67.8m), from €622m in the third quarter of 2011. That takes profits for the year to date to €1.25bn, 45.3 per cent below the €2.285bn recorded in the same period of last year.

Much of that hit came from the sale of the bank’s Greek unit Geniki to Piraeus Bank, on which it made a loss of €130m.

The sale of US-based fund management unit TCW also cost the group €92m.

And financing and advisory profits took a tumble, falling 21.9 per cent from €616m to €481m.

But Societe Generale managed to record strong growth in its investment banking profits, as market sentiment and activity levels improved.

The global markets arm saw profits boom 98.4 per cent to €1.252bn.

That was made up of €575m in equities, and €678m from fixed income, currencies and commodities which skyrocketed from €159m a year earlier.

Analysts said this shows the group is stronger than headline profit suggests.

“This slender profit fell short of analyst expectations,” said Daiwa Capital Markets’ Michael Symonds.

“However the bottom line result was impacted by numerous one-off and non-operational items during the quarter. When restated for these items performance was more resilient.”