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November 3, 2008

Société Générale profit dives 84%

by Gill Montia

Story link: Société Générale profit dives 84%

Société Générale SA posted net profit of €183 million (£144 million) in the three months to the end of September, down 84% percent on the year, from €1.12 billion.

France’s third-largest bank wrote down €1.2 billion during the quarter having taken a hit from the collapse of US investment bank, Lehman Brothers, (€447 million) and the wider turmoil in the global financial sector.

The bank’s chief executive, Frederic Oudea, pointed out that Société Générale has not taken advantage of new accounting rules in preparing its results.

The recently introduced EU rules allowed Deutsche Bank to avoid recording a third-quarter loss because they apply a more generous method of valuing assets than the earlier system.

The French bank was upbeat about its business in Russia and Eastern Europe, which account for around one-fifth of profit, and expects growth patterns in these regions to be stronger than in Western Europe and the US in the coming months.

The group’s consumer banking division saw a 5% fall in profit in the domestic market but its international retail operations reported a 48% rise in profit, during the quarter.

Finally, the bank’s Tier 1 capital ratio stood at 9% on 30th September, up from 8.2% at the end of June.

 

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