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Mixed results for Societe Generale

Mixed results for Societe Generale
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Societe Generale’s quarterly profits were hit by the French bank’s efforts to strengthen its capital reserves.

It is slashing costs, debt and jobs at its key investment banking division to meet tougher regulators’ rules on bank capital and in response to the eurozone sovereign debt crisis.

But France’s second-biggest lender did post a surprise surge in revenue from bond, currency and commodities trading.

SocGen and larger rival BNP Paribas have both been cutting their exposure to the 17-nation eurozone while lending more at home.

The two top French banks are seen as proxies for the euro and their share prices have suffered as market fears intensify over Spain’s recession-wracked economy.

SocGen reported a 21 percent drop in net income to 732 million euros. Revenue fell 4.7 percent to 6.3 billion euros.

As well as lower investment banking earnings, SocGen also started to feel the pinch at its 3,250-plus retail branches in France, which saw profits fall year-on-year for the first time since 2010.

The French economy is slowing down and unemployment is at a 12-year high.

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