SocGen Shares Rise After Lender Reports Q3 Profit Beat

By Scott Kanowsky 

Investing.com -- Shares in Societe Generale SA (EPA:SOGN) jumped by more than 5% on Friday after the French lender posted better-than-expected third-quarter profits.

Reported group net income at France's third-largest bank dipped to just under 1.5B euros ($1.47B), but that was still ahead of consensus estimates for the figure to come in at 1B euros.

The company was boosted by "robust" performance at its global markets and investor services unit, which saw reported net earnings expand to 629M euros.

A volatile trading environment marked by soaring inflation and elevated interest rates helped support fixed-income trading. Equity trading also remained resilient despite the macroeconomic headwinds facing stock markets, outweighing a slowdown in SocGen's advisory services and investment banking offerings stemming from client concerns over a potential recession.

“In an increasingly complex geopolitical and economic environment, Societe Generale posts, once again, excellent results, with both a very solid commercial performance and profitability," said outgoing Chief Executive Officer Fréderic Oudéa, who is set to be replaced by Slawomir Krupa in May 2023.

Oudéa added that risk costs, which aim to hedge against the impact of a possible downturn, remained "contained." Provisions on non-performing loans during the third quarter came in at 154M euros, while an additional provision on performing loans totaled 302M euros.

Analysts at Citi also noted that SocGen's cross-border exposure to Russia, where it halted operations earlier this year in the wake of the outbreak of the war in Ukraine, was reduced to 2.3B euros.