SocGen sees profits slide as bad debts mount, but investment banking thrives
SOCIETE Générale (SocGen) suffered a 52 per cent decline in net profit, the French bank said yesterday, as losses on bad loans mounted and it wrote down its derivatives holdings.
France’s second largest bank, posted profits of €309m (£269m) for the quarter, down from €644m in the same period of last year, despite revenue rising 2.4 per cent to €5.72bn.
SocGen’s results were dented by provisions for bad debt, which rose to €1.1bn, up from the €387m taken in the second quarter of 2008.
The bank also took an €800m hit on changes in the marked-to-market valuation of its credit default swaps, contracts which insure against the risk of debt default.
The group’s corporate and investment banking narrowed last year’s loss of €180m to €12m, but in retail banking SocGen saw profits tumble by 50 per cent to €122m.
Chairman and chief executive Frédéric Oudéa, said the retail bank’s performance had been “resilient”.
“The group is focusing on consolidating its market share, controlling risks and restructuring the activities most severely affected by the crisis… to adapt to the new environment and prepare for the future,” he added.