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Societe Generale SA ADR SCGLY

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Morningstar’s Analysis

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Societe Generale First-Quarter 2021: Very Strong Quarter for the Investment Banking Business

Johann Scholtz, CFA Equity Analyst

Analyst Note

| Johann Scholtz, CFA |

No-moat Societe Generale had a disastrous start to 2020 when large trading losses on structured equity products decimated its top line and saw it reporting a EUR 326 million net attributable loss for the first quarter of 2020. These losses did not recur in the first quarter of 2021 and this--combined with loan loss provisions coming in 67% lower--resulted in a return to profitability and Societe Generale booking a EUR 814 net profit for the first quarter of 2021. Trading results for Societe Generale are materially the medium-term average results. We do not believe there has been a secular change in the profitability structure of securities trading and that it would be dangerous for investors to merely extrapolate the current bumper trading revenue into the future. We maintain our EUR 21 per share fair value estimate and our no-moat rating.

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Company Profile

Business Description

Founded in 1884, Societe Generale is one of France's major banks. It was historically viewed as primarily a corporate and investment bank, but it has meaningful retail banking operations in France, Eastern Europe, Russia, and North Africa.

29, Boulevard Haussmann
Paris, 75009, France
T +33 142142000
Sector Financial Services
Industry Banks - Regional
Most Recent Earnings Dec 31, 2020
Fiscal Year End Dec 31, 2020
Stock Type
Employees 149,022