Societe Generale Q2 profit slumps 31% on Greece debt
French banking giant Societe Generale said Wednesday its second quarter net profit slumped 31 percent to 747 million euros ($1.07 billion), largely because of its exposure to debt-stricken Greece.
The bank also downgraded its outlook, saying that its forecast for a 2012 net profit of 6.0 billion euros "looks difficult to achieve."
Societe Generale set aside 395 million euros -- or 268 million euros after tax -- to cover its exposure to Greek government bonds in the second quarter.
If this amount is excluded, the results were roughly in line with analyst forecasts from Dow Jones Newswires for a net profit of 933 million euros in the three months to June.
Societe Generale said that despite concerns over the 2012 outlook, it remained confident of achieving a 9.0 percent core capital level by 2013.
The new Basel III accords on banking sector reserves fixes a core capital requirement of 7.0 percent but some banks may have to set aside up to 2.5 percentage points more depending on their size and influence in the financial system.
© 2011 AFP