PARIS (dpa-AFX) - French lender Societe Generale SA (SCGLF.PK, SCGLY.PK) reported Friday higher profit in its second quarter, despite weak French retail results.
In a sluggish economy and in a low interest rate environment, French Retail Banking segment performed badly, while International Retail Banking & Financial Services and Global Banking & Investor Solutions segments posted higher revenues.
Group net income was 1.03 billion euros for the second quarter of 2014, 7.8 percent higher than 955 million euros last year.
Group net income, adjusted for non-economic items such as revaluation of own financial liabilities and DVA, was 1.04 billion euros in the recent quarter, as against the prior year's 1.025 billion euros.
The results included a 210 million euros gain related to the acquisition and initial consolidation of Newedge Group.
Operating income, meanwhile, declined 5.9 percent from last year to 1.24 billion euros. On a like-for-like basis, operating income dropped 1.9 percent.
Quarterly net banking income of 5.89 billion euros, was 3.7 percent lower than the prior-year figure of 6.12 billion euros. When adjusted for changes in Group structure and at constant exchange rates, businesses' net banking income edged up by 0.6 percent year-over-year.
On a like-for-like basis, net banking income declined 4.7 percent.
For the quarter, the Group's ROE stood at 8.8 percent, up 0.4 points from last year.
French Retail Banking segment's adjusted revenues were down 2.5 percent amid weak credit demand.
In International Retail Banking & Financial Services, adjusted revenues grew 2.1 percent, driven by Financial Services to corporates which was particularly dynamic, and marked by the growth of revenues in Africa and Russia.
In Global Banking & Investor Solutions, adjusted revenues went up 2.4 percent with good client-driven activity in a mixed market and reduced volatility.
Operating expenses were up 2.2 percent on a reported basis, but down 1.3 percent like-for-like basis, reflecting the attention paid to controlling costs.
The Common Equity Tier 1 ratio stood at 10.2 percent at end-June 2014, according to CRR/CRD4 rules.
Chairman and CEO Frédéric Oudéa stated, 'This strong commercial momentum aimed at serving its customers, coupled with a marked decline in the cost of risk and controlled costs, enabled the Group to generate Group net income and a level of profitability that were significantly higher. In Q2 14, we confirmed the Group's growth potential and our ability to improve our profitability, challenges of the 3-year strategic plan presented in May.'
In Paris, Societe Generale shares lost 0.98 euro or 2.54 percent on Thursday, and settled at 37.56 euros.
Copyright RTT News/dpa-AFX