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SocGen profit slumps in difficult time for French banks

SocGen profit slumps in difficult time for French banks
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Societe Generale is the latest eurozone bank to suffer worse-than-expected second-quarter results.

Net profit at France’s second largest lender fell 42 percent to 433 million euros as it wrote down the value of TCW, an investment fund it owns in the US, and its Russian subsidiary Rosbank. It also signalled continued challenges at its Greek subsidiary.

In addition the bank took a hit on the cost of selling assets to cut debt.

On Europe’s economy, SocGen’s Chief Executive Frédéric Oudéa told euronews: “We understand the need to restore confidence. It’s not easy heading a bank when there’s this lack of confidence out there all the time. But it does seem to me the main point is the statements made by governments last week and Mario Draghi, saying: ‘We will do what is necessary to save the euro – especially in this transition phase’. And this, more than anything, is fundamental, this political commitment, is essential for the future.”

Among Societe Generale’s rivals, Credit Agricole is looking to sell its Greek subsidiary Emporiki as it scrambled to scale back its 4.6 billion euro exposure in Greece.

Greece’s third largest lender Alpha Bank this week offered to buy Emporiki as part of a long-awaited consolidation in Greece’s battered sector.

At least two other Greek lenders are interested – National Bank and Eurobank – according to a banking source.

It is a nail-biting time for investors in French banks.

Giovanni Magi, euronews’ Paris business correspondent, said: “In August all the main French banks are presenting their half-year results. Which means we’ll be able to see how well they’re succeeding in their efforts to tackle the eurozone crisis that has particularly affected French lenders.”