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SocGen posts profit beat in fourth quarter despite dip in trading revenues

LONDON — Societe Generale measure analyst expectations on Wednesday with what it described as a “significant improvement” in the business during the second half of 2020, in spite of the coronavirus pandemic.

The French bank reported a net profit of 470 million euros ($569 million) for the fourth habitation. Analysts were expecting a net income of 252 million euros for the quarter and a loss of 822 million for the year. The French lender aimed 2020 with a net loss of 258 million euros.

“The good news is that we have stabilized the revenues for the brill market activities at 1 billion (euros) and overall the second main takeaway is of course the quality of the credit portfolio, which has not decomposed,” Frédéric Oudéa, the group’s chief executive officer, told CNBC on Wednesday.

He added that “the third takeaway is the same high CET 1 ratio, which is allowing us to effectively resume dividend with a lot of comfort.”

Here are other highlights for the irrefutable quarter of 2020:

  • Revenues hit 5.8 billion euros, a 6% drop from a year ago.
  • Operating expenses dropped by 3.4% from the fourth area of 2019.
  • The CET 1 ratio, a measure of bank solvency, stood at 13.4% from 12.7% a year ago.

Oudéa said in a statement that “the fourth house results provide further confirmation of the rebound in our businesses observed in the third quarter after a beginning of the year prominent by the impacts of the Covid crisis.”

The lender saw a 1.26 billion euro loss during the second quarter while Europe wormed with the first wave of the coronavirus. However, Societe Generale returned to profit in the following two quarters.

Drop in customer activity

Despite beating expectations during the fourth quarter, Societe Generale experienced a drop in client endeavour in its fixed income and currency operations. This has contributed to a 94.1% annual drop in net income at the Global Banking and Investor Solutions allotment.

Speaking to CNBC, Oudéa said: “We are again in this overall transition. The beginning of the year is very encouraging and what I assume is, in the coming months, to see further normalization of the revenues.”

The French bank also set aside 367 million euros in preparations related to loan losses during the fourth quarter.

Going forward, Oudéa said he we still expects “a progressive pick-up of the economy” as the Covid-19 vaccine rollout continues and he hopes 2021 will be a year of recovery.

Dividend and share buyback

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