SocGen delivers huge beat and swings again to revenue in third quarter
A logo outside a Societe Generale SA bank branch in Paris, France.
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LONDON — Societe Generale beat expectations for its third-quarter earnings on Thursday on the back of more “normalized” market conditions.
The French bank reported a net income of 862 million euros ($1.011 billion) for the third quarter. Analysts had estimated a net income of 458 million euros, according to Refinitiv.
This comes after the French bank reported a net loss of 1.26 billion euros for the second quarter of the year due to Covid-related loan provisions and the reduced value of its trading business.
“There is a strong rebound and a confirmation of our capability to rebound in this still difficult environment,” Séverin Cabannes, deputy CEO at Societe Generale, told CNBC’s “Squawk Box Europe.”
“We’ve demonstrated that in this market normalization condition, we are able to generate significant revenue and profitability,” he added.
Here are other highlights for the quarter:
Revenues hit 5.8 billion euros, a 2.9% decrease from a year ago.Underlying operating expenses fell 7.3% from a year ago, to 4 billion euros.Cost of risk (which sheds light on its risk exposure) amounted to 40 basis points.CET 1 ratio (a measure of bank solvency) hit 13.1%, vs. 12.5% in the previous quarter.
The French lender targeted a CET 1 ratio above 12% at the end of 2020, cost or risk at around 70 basis points and underlying operating expenses of around 16.5 billion euros.
Its two retail units delivered lower net incomes in the third quarter from a year ago. The French retail banking unit saw net income drop by 9% over the last 12 months and international retail banking fell by 34.3% from a year ago.
However, Global Banking reported an increase in net income of 50.6% from a year ago on the back of more “normalized” market conditions in comparison with the first six months of 2020.
Fixed Income and Currencies hit revenues of 569 million euros driven mainly by “healthy activity with European corporate clients, higher revenues in the Americas region and in flow and hedging activities.” The French lender also saw a “sharp rebound” in equity activities.
Shares of Societe Generale were up by almost 5% in early deals on Thursday.