SocGen asset losses smother trading rebound
By Lionel Laurent and Matthias Blamont | November 8, 2012 7:00 PM EST
A rebound in trading revenue at Societe Generale
SocGen, seen as less well capitalised than domestic rival BNP Paribas
While SocGen's investment bank followed rivals like BNP, Deutsche Bank
"Economic growth should remain sluggish overall (in 2013), with a key uncertainty in the U.S. - the fiscal cliff - in the beginning of the year," Oudea said in an interview with Reuters Insider television, referring to the threat of expiring tax cuts and government expenditure.
"In the euro zone, we can't expect miracles."
Nomura analyst Jon Peace said the results were better than expected after stripping out the one-offs. "We see the results effectively as a beat...Like BNP, fairly broad based by division," he said.
Quarterly net profit fell 86 percent to 85 million euros ($108.4 million) from 622 million a year earlier. The mean forecast in a Reuters poll of seven analysts was 139.1 million euros.
Revenue fell 17 percent to 5.4 billion euros, compared with a mean forecast of 5.5 billion in the poll.
Excluding one-off losses and asset-sale costs, only SocGen's French retail network posted a profit decline at the divisional level. Rivals including BNP have started to see a slowdown as the French economy stagnates.
The bank followed BNP in saying that its year-long effort to cut its investment bank down to size was over. It is, however, not expecting to reach BNP's current levels of solvency under tougher Basel III rules before the end of 2013.
The CEO said talks to sell Egyptian unit NSGB
He also said SocGen had yet to receive any charge or allegation in the Libor rate-fixing scandal and said there was nothing new to say about the bank's internal inquiry into the matter.
INVESTMENT BANK REBOUND
Lifted by a central bank-driven recovery in financial markets during the summer, SocGen's corporate and investment bank saw revenue up by a third and profit up fourfold.
Bond trading and other debt products recorded the biggest boom, outpacing revenue growth of 38 percent at BNP and 67 percent at Deutsche Bank, with stocks, options and other equities also getting a lift.
SocGen also made progress in its long-running battle to deplete its stock of toxic debt securities left over from the 2008 financial crisis, selling 5 billion euros' worth between July and October.
Reacting to UBS'
($1 = 0.7840 euros)
(Editing by James Regan and David Cowell)