Societe Generale publishes results that exceed expectations in the first quarter, company news

PARIS (Agefi-Dow Jones) – Despite the uncertainty surrounding the war in Ukraine, Societe Generale has started 2022 with higher-than-expected profits. The French bank on Thursday announced a share of the group’s net profit of 842 million euros for the first quarter against 814 million euros a year earlier. According to the Factset consensus, analysts expected an average quarterly net profit of 337 million euros.

The consequences of the conflict between Russia and Ukraine led to an increase in the value of risk, which amounted to 39 basis points against 21 basis points a year earlier. Almost 60% of the risk burden in the first quarter is due to the group’s Russian risks, said its CFO Claire Dumas. Last month, Societe Generale announced that it had suspended its banking and insurance business in Russia and reached an agreement to sell its stake in Russia’s Rosbank and its Russian insurance subsidiaries, Interros Capital. This investment fund, which belonged to the oligarch, was a previous shareholder of Rosbank.

Rosbank collected a net fee of 136 million euros. Excluding this impact, the cost of risk was 31 basis points.

For 2022, Societe Generale has revised its forecast for the value of risks. The agency estimates it will be between 30 and 35 basis points – up from 13 points in 2021 – whereas previously it expected the cost of risk to be less than 30 basis points this year. The new forecast takes into account the burden of Russian assets to be sold, as well as the impact of the war on the bank’s offshore portfolio. Claire Dumas explained that the group continues “its prudent security policy” and decided not to change the provisions of the Covid-19 pandemic.

Basic net income rose 21.3% in the first quarter to 1.57 billion euros. “This first quarter confirms the strength and resilience of our business model through the stable operation of all our businesses in a more uncertain environment, improved operational leverage and limited cost of risk,” said Group CEO Frederick Udea. , quoted in a press release.

Net banking income (NBI), the equivalent of turnover, rose 16.6% last quarter to € 7.2 billion from all businesses. According to the FactSet consensus, analysts have forecast an average NBI of 6.23 billion euros.

The sale of Rosbank fines capital

La Banque de la Défense estimated that the sale of Rosbank should cost him almost 3.1 billion euros. This loss will be reflected in the accounting only for the second quarter. On the other hand, the operation has already affected the group’s capital and cost it 14 basis points in the first quarter at the CET1 regulatory ratio. The latter was 12.9% at the end of March 2022 compared to 13.5% at the end of March 2021. The residual impact of 4 basis points on the CET1 group will be recorded when the sale of Rosbank is completed “within the next few weeks.” “- said the band.

A retail bank in France resisted. Its PEL / CEL revenue was € 2.16 billion, up 6.4% from the first quarter of 2021 due to interest rate margins, finance and services.

The retail banking and international financial services division increased its activity by 19.4% to 2.2 billion euros in the quarter. The long-term leasing and fleet management company posted a record net bank profit of 53% due to good performance and continued very high demand for used cars. The group, which signed a framework agreement on ALD’s proposed acquisition of LeasePlan, ultimately wants to make “sustainable mobility the third pillar” of its business model, Claire Dumas recalled.

Corporate and investment banking showed good results: revenues increased by 18.1% to 2.75 billion euros, which illustrates, according to Societe Generale, “the relevance of the strategy presented in May 2021.”

Market performance was good in the first quarter of € 1.78 million, up 20.5% from the first quarter of 2021, due to a stronger momentum in fixed income products, loans and foreign exchange than in joint stock companies.

Revenues from financial and consulting activities amounted to 790 million euros, which is 24.4% more than a year.

-Eagles Abadi, L’Agefi. ed .: ECH-VLV

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May 5, 2022 at 02:13 Eastern Time (06:13 GMT)