Click Here!Click Here!
Home / Business / SocGen Posts Surprise Profit Decline on Russia Writedown
SocGen Posts Surprise Profit Decline on Russia Writedown

SocGen Posts Surprise Profit Decline on Russia Writedown

Societe Generale SA (GLE), a second-largest French bank by marketplace value, reported a 13 percent decrease in first-quarter distinction after essay down goodwill during a Russian unit.

Net income fell to 315 million euros ($439 million) from 364 million euros a year earlier, a Paris-based bank pronounced in a matter today. Earnings missed a 868 million-euro normal guess of 8 analysts that Bloomberg News surveyed by phone and e-mail.

Societe Generale, among a biggest unfamiliar banks in Russia, cited “the decrease in a ruble, flourishing doubt concerning a sourroundings and behind performances” in holding a 525 million-euro writedown. The bank fell as most as 2.3 percent in Paris trading.

The U.S. and European Union have imposed sanctions on people and companies after Russia seized Crimea, Ukraine’s especially Russian-speaking peninsula, and allegedly corroborated pro-Russian militants who have taken over partial of eastern Ukraine. The predicament threatens mercantile expansion opposite Europe, quite in countries adjacent Russia or contingent on Russian energy, a European Commission pronounced May 5.

The ruble fell about 8 percent opposite a euro this year, while a Micex Index (INDEXCF) of Russian bonds slumped 12 percent.

Societe Generale slid 2 percent to 42.99 euros by 9:06 a.m., paring this year’s gains to 2.1 percent. Credit Agricole SA (ACA), France’s No. 3 lender by marketplace value, rose as most as 4.5 percent after posting an 85 percent burst in quarterly distinction on a rebate in doubtful-loan provisions.

Investment Bank

Earnings during Societe Generale’s corporate and investment bank fell 16 percent to 409 million euros in a initial quarter. Revenue during a tellurian markets business slumped 7.9 percent, as fixed-income, currencies and line income tumbled 25 percent in a “challenging marketplace sourroundings for rate activities,” a bank said.

Equities income rose about 9 percent to 688 million euros, interjection to “positive marketplace momentum,” it said.

Societe Generale pronounced it finished a merger of a remaining 50 percent of derivatives brokerage Newedge Group yesterday from Credit Agricole in sell for a 5 percent interest in Amundi Group.

Societe Generale’s French consumer-banking gain rose 21 percent in a initial entertain from a year progressing to 323 million euros, a association said. That kick a 309 million-euro normal guess of 6 analysts.

Confirms ‘Commitment’

The general banking and financial services section swung to a detriment of 284 million euros from a distinction of 256 million euros since of a writedown in Russia, Societe Generale’s largest marketplace by clients outward France.

The bank pronounced it “confirmed a long-term perspective of a intensity of a Russian banking marketplace and a commitment,” by purchasing a minority interests in Rosbank, a Moscow-based unit, in April.

Goodwill represents a volume paid for a association above a satisfactory value of a assets, and includes intangibles such as a brand, patron bottom and reputation.

Societe Generale targets a sum return-on-equity, a sign of profitability, of about 10 percent by a finish of 2015 compared with 8.4 percent final year, incompatible well-developed gains and charges. The bank will plead a financial goals in full during an investors day on May 13.

To hit a contributor on this story: Fabio Benedetti-Valentini in Paris during

To hit a editors obliged for this story: Frank Connelly during Jim Silver

About admin

Scroll To Top