Societe Generale update
Sign up for myFT Daily Digest and be the first to learn about Societe Generale’s news.
Societe Generale continued to recover from last year’s large trading losses, and announced its best first-half performance in five years on Thursday morning.
The Paris-based bank was hit last spring by the implosion of its equity derivatives products when the company cancelled dividend payments during the first wave of the pandemic. The bank said it had net income of 1.4 billion euros in the second quarter of 2021. .
This is higher than the 1.3 billion euro loss in the same period last year and 68% higher than analysts’ forecasts.
Societe Generale’s net banking revenue increased by 18% to 6.3 billion euros, reflecting the strong performance of its various business lines.
CEO Frédéric Oudéa stated that the bank has been committed to anticipating customer needs and has taken actions to “improve the group’s operational efficiency and maintain the robustness of its loan portfolio and risk management.”
After SocGen experienced a period of turbulence, it achieved strong performance.The bank is one of the worst performing banks in Europe pressure test, Announced last week.
Regulators used scenarios where the EU’s GDP fell by 3.6% and the unemployment rate reached 12.1% to test the performance of the bank’s balance sheet.
Under this severely affected situation, the ratio of Société Générale’s common stock to risk-weighted assets fell from 13.16% to 7.54%, which is far below the industry average of slightly higher than 10%.
Industrial Bank agreed Lyxor for saleIn June, its fund management department acquired French investment group Amundi for 825 million euros in cash.
The transaction does not include approximately 16 billion euros of assets managed by Lyxor in areas such as structured products, which will be retained by SocGen.
The bank said that once the transaction is completed, it expects to receive approximately 430 million euros in capital gains.