Societe Generale Bounces Back From Russia Write-Down

By Noemie Bisserbe 

        PARIS--Societe Generale SA said Wednesday that first-quarter net profit rose more than fivefold as the French bank bounced back from heavy losses in Russia.
        The Paris-based lender, France's third-largest listed bank by assets, said net profit soared to EUR868 million ($972.32 million) in the three months through March, from EUR169 million a year earlier.
        Profit was hurt in the first-quarter last year by a EUR525 million write-down at its Russian bank, one of the country's largest private lenders, as a deepening sanctions battle over Ukraine tipped the country into recession.
        Societe Generale's earnings in the first quarter reflect the strong performance of investment banks across Europe and the U.S., helped by volatile markets and a pickup in corporate loan demand.
        Trading banks such as Societe Generale, BNP Paribas SA, and J.P. Morgan Chase & Co. received a boost in the quarter after the Swiss National Bank scrapped a cap on the franc, the European Central Bank announced its quantitative easing program and the U.S. Federal Reserve took steps to tighten monetary policy.
        Net income at Societe Generale's global banking and investor solutions division, which includes investment banking, security services and asset management, jumped by 21% to EUR522 million, compared with EUR430 million in the same quarter last year.
        The bank, however, continues to suffer from its exposure to Russia. While Russia currently accounts for only about 5% of the group's total revenue, Societe Generale once had big ambitions in the country, betting that its local lender Rosbank would help drive growth as Europe struggled to pull itself out of the financial crisis.
        Societe Generale posted a EUR91 million loss in Russia in the first quarter, hurt by a still faltering economy.
        In France, retail banking net profit fell 6% to EUR273 million, because of an accounting charge.
        Societe Generale's core tier-one ratio, which compares top-quality capital such as equity and retained earnings with risk-weighted assets, was stable at 10.1% at the end of March.
        First-quarter revenue increased by 12% to EUR6.35 billion from EUR5.66 billion in the same period last year.
        Last week, French rival BNP Paribas said that first-quarter net profit rose 18% to EUR1.65 billion in the three months through March, buoyed by investment bank earnings and a weakening euro.
        Write to Noemie Bisserbe at noemie.bisserbe@wsj.com
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        (END) Dow Jones Newswires

        May 06, 2015 01:00 ET (05:00 GMT)

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