French bank SocGen eyes rebound
French bank Societe Generale said on Tuesday it aimed to double its profits over two years, insisting it had moved on since losing billions of euros in a rogue trade scandal in 2008.
Societe Generale said it aimed to double net profits by 2012 to six billion euros (7.3 billion dollars) from a target of three billion this year and to grow its revenues four percent annually.
The announcement came during the second week of the trial of the bank's former trader Jerome Kerviel, accused of gambling away 4.9 billion euros (7.1 billion dollars at the time) and forcing it to unwind 50 billion euros in risky deals.
The scandal shook the bank months before the fall of US investment giant Lehman Brothers in September 2008, which sparked a global financial crisis and widespread recession.
The trial has seen bitter wrangling between Kerviel and his former employers who accuse him of hiding his risky bets, while he insists his bosses knew what he was doing and turned a blind eye as long as he was making a profit.
"For me, it's in the past," said the group's chief executive Frederic Oudea, who was financial director at the time of the scandal.
"It was two and a half years ago. A lot has happened since then," he told a news conference.
"Societe Generale responded immediately" to the discovery of the risky trades, Oudea added. "There was a need to reinforce controls and we did so."
In Friday's earnings statement, Oudea said that "the results delivered in the first quarter are a first tangible proof of our ability to rebound."
Last month it posted a net profit of 1.06 billion euros for the first quarter of the year, compared to a loss of 278 million euros in the first three months of 2009. Analysts have forecast profits of 3.1 billion euros in 2010.
Societe Generale on Friday announced a new strategy focusing on its French networks, international retail banking and corporate and investment banking.
It said that losses on hard-to-sell toxic assets in its portfolio would not exceed 700 million to one billion euros this year, in line with previous expectations. Such assets are to be reduced by 60 percent by 2015.
"The last few years have been challenging for the group, its shareholders and employees but we have learnt from the crisis," Oudea said in an earnings statement, adding that "2010 represents a new period for Societe Generale."
The bank said on Monday it was buying regional bank Societe Marseillaise de Credit (SMC) in southern France for 872 million euros from banking group BPCE, prompting its own shares to jump.
On Tuesday morning Societe Generale's stock price crept up 0.14 percent to 25.09 euros.
© 2010 AFP