SocGen
Soceite Generale profits slump but beat Street forecasts

Societe Generale posted a 20 percent drop in first quarter net income as asset sales and a charge against the value of its own debt offset a strong performance in its fixed-income division.

France's second-largest bank said net income was €732m for the first three months of the year, down from €993m a year earlier. Total group revenues were 4.7 percent lower at 6.3bn. The figures were slightly better than some analysts' forecast.

SocGen shares were the fastest mover on France's CAC-40 Thursday, rising more than 4 percent in early Paris trading to change hands at €18.73, taking the year-to-date gain to almost 10 percent.

SocGen's corporate and investment banking unit contributed just under half of the bank's bottom line, adding €351m in profits. Although the figure was down 41 percent from the same time last year, it did mark a swing into profit from a €482m loss in the fourth quarter of 2011. Revenue growth in currency, fixed income and commodities rose 39 percent.

The bank booked a €226m charge against the value of its own debt. Many European banks have seen their profits hit by this accounting entry, which compels the firms to set aside a set amount of cash to reflect the cost of buying back their debt in the open market. As bank performance has improved, this accounting charge has become more onerous.

SocGen's so-called Tier 1 capital ratio, a measure of the cash the bank needs to set aside in order to protect shareholders and depositors against potential losses, rose to 9.4 percent thanks to an aggressive asset-sale programme that raised around €6.4bn.