Société Générale shares the results of the third quarter well (Flickr)
* Increase of 32.4% of net income in the third quarter * Earnings of € 250 million with the revaluation of Euroclear shares * Stabilization of revenues from interest rate activities in the third quarter * The share gained over 2% % at the opening
(Updated with stock quotes and analyst comments) by Matthieu Protard and Inti Landauro PARIS, November 8 (Reuters) – Société Générale SOGN.PA reported Thursday's results above expectations in the third quarter, thanks in particular to a stabilization of income from interest rate activities and extraordinary gains relating to the revaluation of its Euroclear shares.
On the Paris stock exchange, the market has accepted this quarterly publication. The Société Générale shares opened more than 2% and marked the second biggest increase of the CAC 40 .FCHI.
At 9:45 am, the stock rose 3.68% to € 34.38 while, at the same time, the European banking index earns 1.17%. However, from the beginning of the year, it has lost more than 20% of its value.
Jefferies analysts say in a research note that the bank performed a "good performance" during the quarter on most of its business, but they expect it to reproduce this kind of performance a quarter after the other.
They also point out that there is an agreement on the latest litigation in the United States.
As negotiations continue with US authorities to resolve a dispute over dollar transactions involving countries affected by the US economic embargo, SocGen now ensures that the penalty across the Atlantic is "fully" covered.
To do this, he included an additional provision of € 136 million in litigation for his quarter, but without specifying how much of this new provision was assigned to the US litigation.
"The group closes this quarter the financial impact of major disputes with US authorities on the pre-financial crisis," said Frédéric Oudéa, CEO of the banking group, quoted in a statement.
In June, the bank had already agreed to pay 1.1 billion euros to close two other disputes in the United States, one relating to the manipulation of the Libor interbank rate, the second relating to the Libyan sovereign wealth fund.
RETURN ON TARIFFS MARKETS
In the third quarter, the net profit of the French bank amounted to 1,234 million euros, up 32.4% while its net banking income (GDP) grew by 9.6% to 6,530 million euros . EUR.
According to the Inquiry Financial consensus for Reuters, analysts expected net bank net profit of 6,001 million euros and a net profit of 917 million for the third quarter.
In the investment banking sector, it recorded a stabilization of its income in interest rate activities after a contraction of 1% between March and June. BNP Paribas BNPP.PA and Crédit Agricole CAGR.PA, on the other hand, recorded a decline in their income in this activity.
More generally, the corporate and investment banking sector recorded an increase of 7.7%. In the retail banking sector in France, where the bank closed 75 branches from the beginning of the year, net banking income increased by 1.8%.
The revaluation of Euroclear shares held by SocGen generated a gain of 250 million euros on its net income. These securities are now registered at € 1,820 per share against € 840 previously.
The group, which emerged on Friday as the least well-capitalized French bank in the extreme stress test scenario conducted by the European Central Bank, also indicates that its CET 1 solvency ratio was 11.2% at end of September.
In recent months, SocGen has accelerated the refocusing of its activities. In early August, it sold its activities in Bulgaria and Albania.
It also sold its Polish subsidiary Eurobank to Bank Millennium MILP.WA for 425 million euros.
Also announced Thursday that it has signed a definitive agreement to resume Commerzbank's "equity and commodity markets" activities.
The press release: http://bit.ly/2DbaDLP (edited by Jean-Michel Bélot)