Societe Generale Q2 earnings rise 8.1%

Paris / AFP

French bank Societe Generale said on Wednesday its second-quarter earnings rose 8.1 percent from a year earlier, bolstered by the sale of its shares in Visa Europe.
The bank reported a 1.5 billion euro ($1.7 billion) net profit for the period, higher than the 1.4 billion euros predicted by economists in a survey by FactSet.
Selling its shares in Visa Europe back to parent company Visa Inc earned the lender 662 million euros, after tax.
The bank’s performance also improved strongly when stripped of one-off items and changes in valuations, with net income on this basis jumping by 41 percent to 1.6 billion euros.
“All in all, the bank’s earnings look resilient mostly due to the one off from VISA sale,” said analysts at ING bank.
“The development was weak especially in the bank’s Global banking & Investor solutions” unit, where net profit fell 36 percent to 448 million euros in the second quarter.
The bank suffered from market volatility sparked by Britain’s vote to leave the European Union, while some other banks booked higher earnings from commissions due to the increased trading around the Brexit vote.
Ultra low interest rates that the European Central Bank has introduced to boost the eurozone economy have hurt earnings at Societe Generale’s key domestic retail network, with net income from banking operations down 2.9 percent to 2.1 billion euros.
Retail banking outside France and specialised financial services fared better, with net profit jumping 36 percent to 436 million euros.
The bank’s capital ratio, a key measure of its financial strength, stood at 11.1 percent as of the end of June.
Societe Generale’s shares jumped more than 4 percent at the opening of trade in Paris. They later showed a gain of 4.3 percent in late morning trading, while the Paris CAC 40 index was down 0.5 percent.