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SocGen tops forecasts on turnaround

City A.M. Reporter
FRENCH bank Societe Generale yesterday beat forecasts for first-quarter profit, helped by investment banking, and predicted a lasting rebound in 2010.

Societe Generale also said its exposure to Greek sovereign debt was €3bn (£2.6bn), a day after its share price fell to a two-month low amid market turmoil over Greece. “Societe Generale is confident of being able to achieve its targets for 2010... It anticipates a sustainable rebound,” it said. The bank is “comfortable” it can meet forecasts for 2010 profit, or €3bn, a spokeswoman said.

The group is a month away from an expected unveiling of its future strategy as it tries to navigate market volatility and uncertainty in key international markets like Eastern Europe and Greece.

Societe Generale reported first-quarter net profit of €1.1bn, above a forecast for €614m in a Reuters poll.

Corporate and investment banking netted €541m in quarterly earnings, as improved financial market conditions helped boost equities revenues and reduce the amount of writedowns on toxic assets. In the first quarter of 2009, Societe Generale had reported a loss of €278m.

The French bank also said its total exposure to Greek sovereign debt was €3bn, following weeks of broad market turmoil over bank exposure to debt-stricken Greece.

Larger rival BNP Paribas has not yet disclosed its exposure to Greece. Another rival, Credit Agricole, has said its Greek sovereign exposure was €850m.

Yesterday, Societe Generale’s share price closed down 5.6 per cent, to €38.62, its lowest level since 19 February, giving it a market capitalisation of €30.3bn.