Societe Generale reports profits plunge
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PARIS, Feb 13 AFP
February 14 2013, 01:03AM
French bank Societe Generale reported on Wednesday that net profit in 2012 plunged by two thirds owing to exceptional charges but said it had met all its strategic targets.
The bank reported a net profit last year of 774 million euros ($A1.02 billion), a fall of 67.5 per cent from the figure in 2011.
The price of shares in the bank was showing a fall of 3.67 per cent in early afternoon trading. The overall market as measured by the CAC 40 index was showing a gain of 0.20 per cent.
The results had been hit by exceptional charges of 2.6 billion euros, the bank said in a statement.
But the results, excluding these charges, showed a profit of 3.4 billion euros, similar to the figure of 3.5 billion euros in 2011.
The bank said that it had achieved its strategic targets including the sale of its Greek unit Geniki and US investment business TCW.
It would now put in place the second stage of its strategic plan to 2015, focusing on three activities, including retail banking in France.
This should underpin the potential for growth and profitability, it said.
The board proposed to pay a dividend of 0.45 euros per share. Last year it did not pay a dividend for the first time since it was privatised in 1987, in an effort to strengthen shareholders' funds.
The bank stood by its target to achieve a ratio of core capital to loans made of 9.0-9.5 per cent, under rules laid down by the so-called Basel III standard which takes full effect at the end of 2018.
In the fourth quarter, the bank made a net loss of 476 million euros, which was more than twice the figure expected by analysts polled by Dow Jones Newswires. They had expected a loss of about 206 million euros.
The statement said that the bank had made a provision of 300 million euros in the last quarter of the year in respect of unspecified litigation.
Net banking income, a key measure of the margin between taking money in and lending it out, fell by 9.9 per cent to 23.1 billion euros.