French financial service provider Societe Generale S.A. reported Friday a sharp drop in its third-quarter profit amid weak revenues. According to the company, the net result was penalized by the negative effect of short-term hedges on net interest income in French retail, the impact of which peaked in the third quarter.<\/p>\n
Slawomir Krupa, Chief Executive Officer, said, “This quarter was marked by a good commercial performance in most businesses, limited increase in operating expenses and a low cost of risk. Global Banking and Investor Solutions notably posted stable revenues compared to a high level last year, and International Retail Banking maintained a solid performance.”<\/p>\n
For the three-month period to September 30, the company reported a net income of 295 million euros, a drop of 79.6 percent from 1.445 billion euros last year.<\/p>\n
Earnings were negatively impacted by 610 million euros of exceptional items. This included the goodwill impairment of the African, Mediterranean basin and overseas activities, and equipment finance activities for a total of around 340 million euros, and the booking of a provision for deferred tax assets of around 270 million euros.<\/p>\n
Impairment losses on goodwill were at 338 million euros, while there were no such charges last year.<\/p>\n
Group net income excluding exceptional items was 905 million euros.<\/p>\n
Operating income stood at 1.513 billion euros, down 26.6 percent as against previous year’s 2.061 billion euros.<\/p>\n
Operating expenses were at 4.360 billion euros, up 6.8 percent from 4.083 billion euros a year ago.<\/p>\n
Net banking income decreased 6.2 percent to 6.189 billion euros from 6.600 billion euros in 2022. At constant perimeter and exchange rates, net banking income dropped 9.2 percent.<\/p>\n
The drop in revenues was mainly due to the decline in the net interest income in French Retail, Private Banking and Insurance, and negative revenue in the Corporate Centre.<\/p>\n
Revenues recorded by French Retail, Private Banking and Insurance decreased 16.4 percent owing to the decline in the net interest income which continues to be impacted by short-term hedges that were taken until 2022. Insurance’s revenues climbed 11 percent.<\/p>\n
In Paris, Societe Generale shares were trading at 21.82 euros, up 0.95 percent.<\/p>\n
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