Societe Generale overcomes market volatility

3rd August 2006, Comments 0 comments

PARIS, Aug 3, 2006 (AFP) - French banking group Société Générale reported Thursday that second-quarter net profit rose by 37.9 percent, with its finance and investment divisions posting strong growth amid market volatility.

PARIS, Aug 3, 2006 (AFP) - French banking group Société Générale reported Thursday that second-quarter net profit rose by 37.9 percent, with its finance and investment divisions posting strong growth amid market volatility.

Overall net profit rose to EUR 1.320 billion from EUR 957 million in the same quarter last year.

In the first half of 2006, net profit rose to EUR 2.791 billion, a 27.9 percent increase on the EUR 2.183 billion recorded in the same period a year earlier.

The bank said it was able to post strong results despite a stock market slump in May, but it made a sharp increase in bad-loan provision.

"Although mixed, the financial and economic environment remained favourable overall for the group's businesses: economic activity in the US and Europe was robust and European long rates increased," its results statement said.

Corporate and investment banking activities posted a leap of 70.2 percent in second quarter profit to EUR 589 million, and an increase of 46 percent in the first half to EUR 1.232 billion.

"Client-driven activity was outstanding ... while proprietary trading activities also made a strong contribution," the bank said.

Overall net banking income in the second quarter rose by 28.1 percent to EUR 5.709 billion. In the first half of the year it increased by 24.8 percent to EUR 11.484 billion.

This was largely owing to contributions from foreign networks, financial services, asset management and investor services.

The bank reinforced provisions against bad loans however by 60.3 percent to EUR 314 million.

Net earnings per share came to EUR 6.76 in the first half of year, a 26.1 percent increase from the same period a year ago.

Société Générale shares initially rose on the Paris stock exchange, but showed a loss of 0.50 percent to EUR 118.70 in afternoon trades, while the CAC 40 index of leading shares was 0.94 percent lower overall.

A Paris broker who asked to remain anonymous had nonetheless said: "Société Générale published very good results, particularly in investment banking."

At the CA Cheuvreux brokerage, analysts said that "all divisions contributed to the growth.

"French retail banking did better than expected thanks to lower costs and a favorable basis of comparison."

Copyright AFP

Subject: French news

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