Third-quarter profits tumble at SocGen

Societe Generale reported a slide in quarterly revenues and profits on Friday, dragged lower by a weaker performance at its retail bank.

The French lender said group revenues for the three months to 30 September fell 6.2% to €6.2bn, which it largely attributed to the impact of short-term hedges on the net interest income at its retail arm.

Analysts had been expecting revenues closer to €6.3bn.

Operating income fell 26.6% to €1.5bn, while previously announced one-off charges totalling €610m meant net income tumbled 79.6% to €295m. It was, however, comfortably above analyst forecasts of €168m.

Slawomir Krupa, chief executive, 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 high levels last year, and international retail banking maintained a solid performance."

Although interest rates have risen worldwide, French banks have not benefited as quickly as international rivals as France has strict rules surrounding how quickly lenders can pass on higher borrowing costs.

Net interest income (NII) at the retail division fell by 27% in the quarter, once the impact of two regulated savings accounts was stripped out. NII is the money banks earn on loans minus the cost of deposits.

SocGen said it expected NII in French retail banking to fall by 20% in 2023 year-on-year.