Societe Generale 4Q Net Profit Falls on One-Offs but Beats Expectations - Update
By Pietro Lombardi
Societe Generale SA (GLE.FR) said Thursday that its fourth-quarter net profit fell significantly, hit by one-off items, but surpassed the loss expected by analysts.
The French lender, the country's third-largest listed bank by assets, reported a net profit of 69 million euros ($85.1 million), compared with a net profit of EUR390 million in the same period last year.
Revenue stood at EUR6.32 billion, up from EUR6.13 billion a year earlier.
For 2017 the French lender reported a net profit of EUR2.81 billion, a 28% decline on year.
Despite the steep decline in net profit, the bank beat expectations of about EUR300 million in net losses in the quarter, according to a Factset consensus.
One-off items weighed on fourth-quarter results, which include a EUR416 million charge related to tax reforms in France and the U.S. The bank took a EUR253 million hit from the tax overhaul in the U.S.
Exceptional items pushed up the group's operating expenses, up 14% in the quarter to EUR5.02 billion. These include a charge of EUR205 million stemming from an audit of various operating taxes by the French tax administration and a court judgment on the processing of checks, as well as EUR390 million related to the restructuring of its French retail operations.
Societe Generale also increased its provision for disputes, which now stands at EUR2.32 billion after the addition of EUR200 million in the fourth quarter.
Net profit at Societe Generale's banking and investor-solution business--which includes investment banking, security services and asset management--decreased 15% to EUR368 million.
Its international retail banking and financial services division posted a 8.2% increase in net profit to EUR474 million, while the French retail bank division's net profit fell 95% to EUR22 million.
The bank's core tier-1 ratio, a key measure of capital strength, fell slightly to 11.4% in December, compared with 11.7% in the previous quarter.
Societe Generale proposed a dividend of EUR2.20 a share, unchanged from 2016.
"We are facing 2018 with confidence, sustained by the ambition to seize the growth opportunities of our activities, in an economic and financial environment that should gradually be more favourable," said Chief Executive Frederic Oudea. "We will focus on the disciplined execution of the first year of our new strategic plan."
Write to Pietro Lombardi at email@example.com
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February 08, 2018 02:46 ET (07:46 GMT)Copyright (c) 2018 Dow Jones & Company, Inc.