September 27, 2022


The headquarters of the French bank Societe Generale in Paris.

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Societe Generale reported better-than-expected earnings on Wednesday, despite a 3.3 billion euro ($3.36 billion) hit from exiting its Russian operations.

The French lender saw every unit rise in the second quarter, which helped offset the impact of its withdrawal from Russia following Moscow’s invasion of Ukraine.

Analysts had expected a net loss of 2.85 billion euros for the quarter, according to Refinitiv, but the bank posted a net loss of 1.48 billion euros.

“We combined, in the first half of 2022, strong revenue growth and underlying profitability above 10% (ROTE) and were able to manage our exit from the Russian operations without significant capital impact and without hindering the Group’s strategic developments,” Fréderic stated. Oudéa, the group’s chief executive, said in a statement.

Speaking to CNBC, Oudéa said the decision to leave Russia is “very sad” but necessary.

“When you invest many years successfully, it’s very sad, but when you see the situation it’s so difficult to manage, so risky in the future, with no clear outcome from all this, so it was clear that it was the best decision.” he told CNBC’s Charlotte Reed.

Other highlights for the quarter:

  • Revenue was €7 billion for the quarter.
  • Operating expenses reached 4.5 billion euros.
  • The CET 1 ratio, a measure of banks’ solvency, stood at 12.9% at the end of June.

The French retail bank posted net profit 18.7% higher than the previous quarter. International retail banking also rose 33% from the previous quarter. The Global Banking unit also saw a nearly 50% jump in net income from the previous quarter.

Going forward, the French bank said it aims to achieve a return on tangible equity, a measure of profitability, of 10% and a CET 1 ratio of 12% by 2025. It also wants average annual revenue growth above or equal to 3%. until then.

The stock is down 28% year-to-date.



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