France's SocGen beats forecasts in Q1 on trading rebound



© Reuters. FILE PHOTO: The facade of a building of the French bank Societe Generale is seen in Paris, France, February 9, 2021. REUTERS/Sarah Meyssonnier

PARIS (Reuters) – France’s third-biggest listed bank Societe Generale (PA:) on Thursday recorded a sharp rebound in its trading business in the first quarter and better-than-expected earnings as it looks to bed down an overhaul of its investment bank.

The lender, which tumbled in 2020 to its first full-year loss for a decade as the COVID-19 pandemic rattled its businesses, posted a 814 million euros net profit in the quarter against a 326 million euros loss a year ago.

Earnings per share amounted to 0.79 euro, above a mean forecast for 0.23 euro according to Refinitiv data.

In equity trading, an area where peers also performed well in the first three months of 2021, revenue jumped to 851 million euros against 9 million euros last year.

A year ago, the French group was hit by turbulence in equities trading, with losses in structured products, and had said it would exit some business lines.

SocGen is due to unveil the review of its corporate and investment bank on May 10.

Revenue was up by 2.63% in fixed income and currency trading, outperforming some European rivals such as BNP Paribas (PA:) and Barclays (LON:) but still lagging U.S. investment banks.

“Global markets enjoyed a record quarter, with the highest level of activity since Q1 2017,” SocGen said in a statement.

SocGen also confirmed pandemic-related provisions would fall this year from 2020 levels. The bank now sees its cost of risk, which reflects provisions against bad loans, to be between 30 and 35 basis points in 2021 against 64 basis points last year.

READ  Samsung Electronics says adjusts production volume at China mobile phone plant

Shares in SocGen have gained 38.5% since the beginning of the year after a 45% slump in 2020. Its share price has more than doubled since its lowest at 10.77 euros on Sept. 30.

As part of an overhaul of its business to boost profitability, SocGen entered last month in exclusive talks to sell most of its asset management arm Lyxor to Amundi for 825 million euros.

The lender said last year it would merge its two retail banking networks in France, with the closure of 600 of its nearly 2,100 branches by 2025. The plan will save more than 350 million euros in costs in 2024 and nearly 450 million euros the year after.

As the coronavirus outbreak accelerates the shift to online banking across Europe, SocGen also aims to strengthen its Boursorama online operation.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

READ  FTSE 100 tumbles below 7,000 points as Diageo warns of £200m coronavirus hit - business live





READ SOURCE

LEAVE A REPLY

Please enter your comment!
Please enter your name here