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Société Générale earnings


Nov 7 2014, 1.15pm GMT


Société Générale shares fell alongside the euro depletion, despite the French bank’s positive results.

The bank’s trading dropped from Thursday’s high of 38.02 to today’s 35.96.

On the same day as Société Générale released their third quarter earnings, ECB head, Marios Draghi was also to make announcements that defined the day’s drop in the euro and on the fall on France 40 [CAC40], the index of Société Générale from 4,263.15 down to 4,203.96.

Actual figures show Société Générale to have exceeded expectations, reporting as follows:

Paris, November 6th, 2014


  • Net banking income**: EUR 5.9bn, -1.8% vs. Q3 13
  • Good control of operating expenses: -0.4%* vs. Q3 13
  • Sharp decline in the commercial cost of risk: 58 bp(1) vs. 69 bp(1) in Q3 13
  • Businesses’ operating income up +9.4%*
  • Substantial increase in Group net income to EUR 836m vs. EUR 534m in Q3 13

9M 14: Increase in Group net income to EUR 2,181m (9M 13: EUR 1,853m)

  • Net banking income up +4.2%* vs. 9M 13
  • Lower operating expenses*: -0.7%* vs. 9M 13
  • Sharp decline in the net cost of risk: -30.6%* vs. 9M 13
  • EPS(2): EUR 2.42

The rise of nearly 57 percent in net income was aided by the reduction of 41 percent in the set-aside finances for additional litigation costs that were not needed. In terms of divisions, domestic retail business fell 3.2 percent though global banking and investor solutions business rose by 1.9 percent. Frédéric Oudéa, chairman and chief executive said in the statement; “Commercial activity remained buoyant in retail banking networks, with significant growth in deposits in all the networks, against the backdrop of still weak credit demand in Europe, and the rapid development of banking activities on the African continent.”

Indeed, the bank’s earnings are positive against a backdrop of weak economic figures in France and the latest ECB stress test results. As pointed out in the earning’s report; “In an environment of very low growth and historically low interest rates in the eurozone, the Group’s net banking income, excluding non-economic items, amounted to EUR 5,871 million, slightly lower than the previous year (-1.8% in Q3 2014, and -1.3% in the first nine months of the year, at EUR 17,616 million).”

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