Societe Generale SA, France’s third-largest bank, reported a surprise first-quarter loss on writedowns linked to US bond insurers and higher provisions for risky loans.
The net loss of 278 million euros (US$370 million) compares with a 1.1 billion euro profit a year earlier, the Paris-based bank said in an e-mailed statement yesterday. Analysts surveyed by Bloomberg estimated Societe Generale would post a profit of 332 million euros.
The French bank, which named chief executive officer Frederic Oudea chairman yesterday, reported 1.5 billion euros of markdowns and a doubling in loan-loss provisions amid the worst financial crisis since World War II. By contrast, BNP Paribas SA, France’s largest bank, posted earnings yesterday that beat analysts’ estimates as a rebound at the investment bank cushioned a surge in bad loans.
“Acute tensions remain in the financial markets,” Societe Generale said in the statement. “However, the effects of the various government stimulus plans should help mitigate the consequences of the crisis in 2009 and allow a gradual resumption of growth, albeit at a very moderate rate.”
Societe Generale rose 22 percent this year in Paris trading, lagging behind BNP Paribas, which climbed 50 percent, and Credit Agricole SA, which advanced 46 percent.
Daniel Bouton, 59, announced his resignation as chairman of Societe Generale last week after complaining of “repeated attacks” following a 4.9 billion euro trading loss in January last year.
The investment bank had a first-quarter loss of 414 million euros, compared with a 141 million euro profit a year earlier. Markdowns included 866 million euros on debt backed by bond insurers, 364 million euros on holdings of exotic credit derivatives, 166 million euros on asset-backed securities and 116 million euros on collateralized debt obligations.
While the first quarter was favorable for financing and fixed income, declining stock markets weighed on the equities business, the company said. The situation remained difficult for “high-risk exposures” tied to the US residential and commercial real-estate markets, Societe Generale said.
BNP Paribas, Credit Suisse Group AG of Zurich, Frankfurt-based Deutsche Bank AG, and Goldman Sachs Group Inc and JPMorgan Chase & Co, based in New York, all announced first-quarter results that beat analysts’ forecasts, buoyed by a thaw in credit markets that spurred debt sales.
The world’s biggest financial companies have booked more than US$1.37 trillion in writedowns and credit-related losses since the beginning of the US subprime mortgage crisis in 2007, forcing them to raise US$1.12 trillion euros in capital from government and investors, Bloomberg data showed.
Societe Generale raised 5.5 billion euros from investors last year to replenish reserves following trading losses the bank blamed on former employee Jerome Kerviel.
The company said yesterday it agreed to issue preferred shares to the government to raise 1.7 billion euros in a second round of state aid. The bank bolstered funds last year by selling 1.7 billion euros in subordinated debt to the government.
The bank’s Tier 1 capital ratio, a key indicator of financial health, was 9.2 percent at the end of March, when the second round of government assistance is included.
Earnings at Societe Generale’s French consumer banking network dropped 29 percent to 216 million euros in the quarter. Profit from international retail banking slumped 40 percent to 118 million euros, hurt by a “significant” increase of loan-loss provisions in Russia.
AIR SUPPORT: The Ministry of National Defense thanked the US for the delivery, adding that it was an indicator of the White House’s commitment to the Taiwan Relations Act Deputy Minister of National Defense Po Horng-huei (柏鴻輝) and Representative to the US Alexander Yui on Friday attended a delivery ceremony for the first of Taiwan’s long-awaited 66 F-16C/D Block 70 jets at a Lockheed Martin Corp factory in Greenville, South Carolina. “We are so proud to be the global home of the F-16 and to support Taiwan’s air defense capabilities,” US Representative William Timmons wrote on X, alongside a photograph of Taiwanese and US officials at the event. The F-16C/D Block 70 jets Taiwan ordered have the same capabilities as aircraft that had been upgraded to F-16Vs. The batch of Lockheed Martin
GRIDLOCK: The National Fire Agency’s Special Search and Rescue team is on standby to travel to the countries to help out with the rescue effort A powerful earthquake rocked Myanmar and neighboring Thailand yesterday, killing at least three people in Bangkok and burying dozens when a high-rise building under construction collapsed. Footage shared on social media from Myanmar’s second-largest city showed widespread destruction, raising fears that many were trapped under the rubble or killed. The magnitude 7.7 earthquake, with an epicenter near Mandalay in Myanmar, struck at midday and was followed by a strong magnitude 6.4 aftershock. The extent of death, injury and destruction — especially in Myanmar, which is embroiled in a civil war and where information is tightly controlled at the best of times —
Taiwan was ranked the fourth-safest country in the world with a score of 82.9, trailing only Andorra, the United Arab Emirates and Qatar in Numbeo’s Safety Index by Country report. Taiwan’s score improved by 0.1 points compared with last year’s mid-year report, which had Taiwan fourth with a score of 82.8. However, both scores were lower than in last year’s first review, when Taiwan scored 83.3, and are a long way from when Taiwan was named the second-safest country in the world in 2021, scoring 84.8. Taiwan ranked higher than Singapore in ninth with a score of 77.4 and Japan in 10th with
China's military today said it began joint army, navy and rocket force exercises around Taiwan to "serve as a stern warning and powerful deterrent against Taiwanese independence," calling President William Lai (賴清德) a "parasite." The exercises come after Lai called Beijing a "foreign hostile force" last month. More than 10 Chinese military ships approached close to Taiwan's 24 nautical mile (44.4km) contiguous zone this morning and Taiwan sent its own warships to respond, two senior Taiwanese officials said. Taiwan has not yet detected any live fire by the Chinese military so far, one of the officials said. The drills took place after US Secretary
RSS